ANDHRA PRADESH HIGH COURT AT AMARAVATHI
Lalitha Kanneganti, J.
Nakka Venkata Ramudu - Appellant
Versus
C. Ramireddy - Respondent
Civil Revision Petition No. 1680 of 2017
Decided On : 05-05-2021
Insolvency - Jurisdiction - The court set aside the order returning the insolvency petition, holding that the Civil Court had jurisdiction to try insolvency petitions as the Debt Recovery Tribunals were yet to be notified to deal with the matters as per the Insolvency and Bankruptcy Code, 2016.
Fact of the Case:
The petitioner filed an insolvency petition under Section 10 of the Provincial Insolvency Act, 1920, which was returned by the court citing lack of jurisdiction due to the Insolvency and Bankruptcy Act, 2016.
Finding of the Court:
The court allowed the civil revision petition, setting aside the order of the lower court and directing it to proceed with the insolvency petition as per law, as the Debt Recovery Tribunals were yet to be notified to deal with the matters.
Issues: Jurisdiction of Civil Court to try insolvency petitions under the Insolvency and Bankruptcy Act, 2016.
Ratio Decidendi: The court held that as the Debt Recovery Tribunals were yet to be notified to deal with the matters as per the Insolvency and Bankruptcy Code, 2016, the Civil Court had jurisdiction to try insolvency petitions.
Final Decision: The civil revision petition was allowed, and the lower court was directed to proceed with the insolvency petition as per law.
JUDGMENT
Lalitha Kanneganti, J. - The present civil revision petition under Article 227 of the Constitution of India is filed assailing the order dated 16.03.2017 passed in I.P.(C.F.)No.2873 of 2017 by the learned Principal Senior Civil Judge, Ananthapuram whereby the petition filed by the petitioner under Section 10 of the Provincial Insolvency Act, 1920 (for short 'P.I. Act') was returned on the ground of jurisdiction.
2. The brief facts of the case are:
The petitioner being unable to bear the said pressure, had filed the above mentioned insolvency petition.
3. The Court below returned the said petition by docket order dated 16.03.2017 holding that as per Section 63 of Insolvency and Bankruptcy Act, 2016, Civil Court has no jurisdiction to try insolvency petitions. Assailing the same the present revision is filed.
4. Heard Sri Narasimhulu Parise, learned counsel for the petitioner. Though notice are served on some of the respondents, there is no representation on their behalf.
5. The petitioner filed insolvency petition on the file of the Principal Senior Civil Judge, Anathapuram under Section 10 of the P.I.Act to adjudge him as insolvent vide C.F.No.2873 dated 14.03.2017. The same was returned by the learned presiding officer on 16.03.2017 with an endorsement which reads thus:
6. The Insolvency and Bankruptcy Code, 2016 (Act 31 of 2016) came into force from 28.05.2016. The lower Court referred to Section 63 in Chapter-VI of Part II of the P.I. Act, which deals with adjudication authority for Corporate Persons. Hence, Section 63 of Chapter-VI does not apply to the case on hand.
7. The petitioner, an individual, filed insolvency petition to adjudge him as insolvent. Hence, Part III of Act 31 of 2006 would be applicable. However, Section 49(1) defines adjudication authority means Debts Recovery Tribunal constituted under sub-section (1) of Section 3 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Chapter VI of part-III of the P.I. Act also makes it clear about the adjudicating authority for individuals and partnership firms and express of Civil Courts.
8. The learned counsel for the petitioner submits that though the Debt Recovery Tribunals are having territorial jurisdiction over the place where the individual debtor actually and voluntarily resides as per Section 179 of the P.I. Act 31 of 2016, the Government has not notified the Debt Recovery Tribunals to deal with these matters. Having no other option, he invoked the jurisdiction of the Civil Court to adjudge him as insolvent.
9. When a similar issue came up for consideration before this Court in W.P.No.7110 of 2019 with regard to constitution of Rent Control Courts under Andhra Pradesh Residential and Nonresidential Premises Tenancy Act, 2017 (Act 10 of 2018), placing reliance on Commissioner of Income Tax, Orissa Vs. Dhadi Sahu, (1994) Supp1 SCC 257, held that till the adjudicatory machinery contemplated under an enactment is brought into existence, the arrangement that has been functional prior to it would continue."
10. In the light of above, since the Debts Recovery Tribunals are yet to be notified to deal with the matters as
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.