Our practice includes advising and representing Debtors, Guarantors in their disputes with secured creditors. We regularly appear before Debt Recovery Tribunals and Appellate Tribunals in matters arising out of SARFAESI Act.
The laws relating to insolvency of individuals and partnership are contained in Presidency Towns Insolvency Act and Provisional Insolvency Act. The Presidency Towns Insolvency Act applies to Kolkata, Chennai and Mumbai and the Provisional Insolvency Act applies to the other parts of country. Under the Provincial Insolvency Act, it is the Insolvency Courts where the debtor resides, or carries on business or works for gain, which have the jurisdiction to take up petitions filed under Section 7 of Provisional Insolvency Act either by the Creditor or the Debtor himself. The act empowers the court to appoint to appoint an Interim Receiver of the property of the Debtor. Besides this, court can also order attachment of the property of the Debtor or order detention of the Debtor etc. Decisions of Interim Receiver can be challenged by the Creditors. An appeal lies to the District Court from the orders passed by the Insolvency Court. Besides the above acts several states have their own acts regarding insolvency of individuals and partnerships.
The Provisional Insolvency Act and the Presidency Towns Insolvency Act have been replaced by the Part III of Insolvency and Bankruptcy Code, 2016 which contains provisions related to Insolvency Resolution and Bankruptcy for individuals and partnership firms. However the said part of the code has not been notified yet. The Insolvency & Bankruptcy has brought in significant changes to the Insolvency and Bankruptcy process involving the individuals and partnerships. The code now provides for appointment of an Insolvency Professional as a Bankruptcy Trustee by the adjudicating authority viz. the Debts Recovery Tribunal. The orders passed by the Debts Recovery Tribunal can be challenged before the Debt Recovery Appellate Tribunal and then an appeal lies to the Supreme Cour
Debt Recovery Tribunals and Debt Recovery Appellate Tribunals were established under Recovery of Debts Due to Banks and Financial Institutions Act. Proceedings against individuals and partnership firms can be initiated under the SARFAESI Act in respect of the recovery of loans and debts owed by individuals and partnership firms. The procedure governing the proceedings under the SARFAESI Act is contained in DRT Rules and Civil Procedure Code.
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