Practice Areas

Follow us

Retired Partner Cannot Initiate Proceedings Under IBC Against Other Partners Or Firm For Retirement Dues: NCLT, Mumbai

[01 March 2022] The NCLT, Mumbai Bench consisting of Kishore Vemulapalli, Judicial Member and Rajesh Sharma, Technical Member in the case of Anil Vora HUF v. Kavya Build-Con Private Limited rejected the Section 9 application filed by the Operational Creditor on the ground that a retired partner cannot initiate proceedings under section 9 of the Insolvency and Bankruptcy Code, 2016 to claim retirement dues against other partners or the Firm.
The Applicant/Operational Creditor of the Corporate Debtor filed an application under section 9 of the IBC, 2016 seeking initiation of CIRP against the Corporate Debtor- Kavya Build-Con Private Limited on the ground that the Corporate Debtor had failed to make payment of a sum of Rs. 75,00,000 to the Applicant, who was a partner in the firm- M/s Kavya KCD Developers (Firm).
By virtue of the deed of retirement, the Applicant was granted a lumpsum consideration of Rs. 75,00,000 including the amount standing towards the Operational Creditor’s credit in the Books of Account.
The NCLT held, “The Operational Creditor may be liable to the claims against the Corporate Debtor not under the IBC but under the any other law which provides the remedy to the Operational Creditor. The Retired Partner has no right under the IBC to file claim against the Partner or the Firm.”

Warning: Trying to access array offset on value of type bool in /home/bighelpers/public_html/asialawoffices/wp-content/themes/justicia/framework/modules/blog/templates/parts/single/single-navigation.php on line 18