Application under Section 9 of IBC, 2016 is not a suit

Last updated: 21 February 2023
Quick Summary
The National Company Law Appellate Tribunal (NCLAT) has ruled that an application filed under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, is not a 'suit'. Consequently, the bar under Section 69(2) of the Indian Partnership Act, 1932, which prevents unregistered firms from filing suits, does not apply to such IBC applications. This decision overturns an earlier ruling that had rejected an application based on this misinterpretation.

Court :
NCLAT Delhi Bench

Brief :
The fact that a partnership firm is easy to incorporate and does not require to be registered is the major reason why a number of businesses opt for it. But when the partners choose to sit over it without registering, they will have to pay the price for it quite dearly

Citation :
ROURKELA STEEL SYNDICATE  Vs.  METISTECH FABRICATORS PVT. LTD. NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH,  NEW DELHI COMPANY APPEAL (AT)(INSOLVENCY) NO. 924 OF 2022

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