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

Ramesh, a daily-wage worker in Nashik, has gross annual income of Rs 55,000, assets worth Rs 18,000 and qualifying debts of Rs 30,000. He lives in a rented room and has no fresh start, insolvency or bankruptcy process pending against him. Is he eligible to apply for a fresh start under the Code?

Ramesh is eligible. His income of Rs 55,000, assets of Rs 18,000 and qualifying debts of Rs 30,000 are within the limits of Rs 60,000, Rs 20,000 and Rs 35,000, he owns no dwelling unit, and no other process is pending against him.

  1. AYes, as he meets every monetary and other condition in the eligibility sectionCorrect
  2. BNo, because his income exceeds Rs 50,000
  3. CNo, because his assets must be nil
  4. DNo, because qualifying debts must not exceed Rs 25,000

Explanation

The limits are gross annual income up to Rs 60,000, assets up to Rs 20,000 and qualifying debts up to Rs 35,000. Ramesh's figures of 55,000, 18,000 and 30,000 are all within these limits. He owns no dwelling unit and no other process subsists, so he is eligible. The other options quote limits that do not exist.

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