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

The Applicant/Operational Creditor of the Corporate Debtor filed an application u/s 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, placing reliance on the judgement of the Supreme Court in "Gammon India Ltd V. Neelkanth Mansions and Infrastructure Pvt. Ltd." held that since the Operational Creditor and the Corporate Debtor were partners in the Firm, the application filed by the Operational Creditor is not maintainable and dismissed the same.

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."

Counsel for Operational Creditor: Mr. Dhruva Gandhi, Advocate.

Counsel for Corporate Debtor: Mr. Shanay Shah, Advoacte

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