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CS Professional · Insolvency and Bankruptcy - Law and Practice · Bankruptcy for Individuals and Partnership Firms

Meera Textiles, a partnership firm, carries on business in Coimbatore, while one of its partners, Ravi, resides in Bengaluru. An application for insolvency of the firm's partner Ravi under Part III of the Code is to be filed. Which forum is the Adjudicating Authority for insolvency matters of individuals and firms under the Code?

The Debt Recovery Tribunal is the Adjudicating Authority for individuals and firms. It must have territorial jurisdiction over the place where the debtor actually and voluntarily resides, carries on business or personally works for gain. The NCLT deals with corporate persons, not individuals or partnership firms.

  1. ANational Company Law Tribunal at the registered office of the firm
  2. BDebt Recovery Tribunal having territorial jurisdiction over the place where the individual debtor actually and voluntarily resides, carries on business or personally works for gainCorrect
  3. CHigh Court of the State where the firm was registered
  4. DNational Company Law Appellate Tribunal sitting at New Delhi

Explanation

Section 179(1) makes the Debt Recovery Tribunal with territorial jurisdiction over the place where the individual debtor actually and voluntarily resides, carries on business or personally works for gain the Adjudicating Authority for individuals and firms. The NCLT is the authority for corporate persons, so option A is wrong.

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