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

Mr. Raghav Iyer, an individual residing in Pune, has been declared bankrupt. A bankruptcy trustee is appointed. Under the Code, which authority has jurisdiction over suits and claims by or against him, and who administers and distributes his estate?

The Debt Recovery Tribunal with territorial jurisdiction is the adjudicating authority for individuals and can decide suits and claims by or against the bankrupt. The bankruptcy trustee, not the creditors or the Board, conducts administration and distribution of the estate under the Code.

  1. AThe NCLT at Mumbai hears such claims; the Insolvency and Bankruptcy Board distributes the estate
  2. BThe Debt Recovery Tribunal with territorial jurisdiction hears such claims; the bankruptcy trustee administers and distributes the estateCorrect
  3. CThe civil court at Pune hears such claims; the Official Assignee distributes the estate
  4. DThe Debt Recovery Tribunal hears such claims; the committee of creditors itself distributes the estate

Explanation

For individuals and firms, the Adjudicating Authority is the DRT with territorial jurisdiction, and it can entertain suits and claims by or against the debtor despite any other law. The bankruptcy trustee conducts administration and distribution of the estate. The NCLT option is wrong because the NCLT handles corporate persons.

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