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

Mr. Vikram Desai, an individual, resides and carries on business in Surat. A suit against him is pending, and a question of priorities among his creditors arises in his insolvency under Part III. Which statement correctly describes the forum and its jurisdiction?

The Debt Recovery Tribunal with territorial jurisdiction over where he resides or carries on business is the Adjudicating Authority. It can entertain suits, claims and priority questions arising from his insolvency, notwithstanding any other law, so the civil court does not retain that jurisdiction.

  1. AThe Debt Recovery Tribunal with territorial jurisdiction over his place of residence or business, which can decide the suit, claims and priority questionsCorrect
  2. BThe NCLT at Ahmedabad, which decides only the priority question
  3. CThe civil court, which keeps jurisdiction over suits against him despite the Code
  4. DThe High Court, which decides all questions of fact only

Explanation

The Adjudicating Authority for individuals and firms is the Debt Recovery Tribunal having territorial jurisdiction over where the individual actually and voluntarily resides, carries on business or personally works for gain. It can entertain or dispose of any suit or proceeding by or against the debtor, any claim, and any question of priorities, notwithstanding other laws. So the civil court option is wrong.

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