Registration Of A Partnership Firm Not A Pre-Requisite For A Section 9 Petition: NCLT Mumbai

The National Company Law Tribunal, Mumbai Bench, comprising Shri Kuldip Kumar Kareer (Judicial Member) and Shri Prabhat Kumar (Technical Member), while adjudicating an application under Section 9 of Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) in Haren Sanghvi & Associates vs CDigital Arts & Crafts Private Limited has held that registration of partnership firm is not a pre-requisite for filing of a petition under Section 9 of IBC, 2016 Background Facts CDigital Arts & Crafts Private Limited (“Corporate Debtor”) engaged the accounting and management services of Haren Sanghvi & Associates (“Operational Creditor”). the Operational Creditor raised 6 invoices against the Corporate Debtor however the Corporate Debtor failed to make payment of the same. Various communications were sent by the Operational Creditor to the Corporate Debtor for repayment of the amount between 2016 and 2019 but the Corporate Debtor continued to default on the repayment. Thus the Operational Creditor was constrained to issue a Demand Notice dated 04.11.2019. It was contended by the Corporate Debtor that no amount was due and payable by the Corporate Debtor to the Operational Creditor. There was further a failure on the part of the Operational Creditor to disclose the existence of a dispute. It was further contended that the Operational Creditor had not provided any documents regarding it being a registered partnership firm whereas the Applicant in the affidavit submitted by the Operational Creditor stated that Mr. Haren Sanghvi was a Partner of the Operational Creditor. Findings of the Tribunal It was observed by the Tribunal that just because the ledger accounts of the Corporate Debtor do not reflect the invoices raised by the Operational Creditor, it did not mean that the same were not validly issued or that the services were not rendered by the Operational Creditor. Further, 4 out of the 6 invoices were within the period of limitation and the values of these invoices were more than Rs. 1 lakh. It was further observed that there was no pre-condition or requirement for a firm to be registered under the Indian Partnership Act for it to file a petition under Section 9 of IBC, 2016. With the aforesaid observations, the Tribunal admitted the petition. Case: Haren Sanghvi & Associates vs CDigital Arts & Crafts Private Limited Case No. C.P. 4427/IB/MB/2019 Counsels for the Applicants Adv. Shamiana i/b Adv. Rakesh Sawant Counsel for the Respondent Adv. Suyesha Kakarla i/b M/s. Apex Law Partners Click Here To Read/Download Order

Registration Of A Partnership Firm Not A Pre-Requisite For A Section 9 Petition: NCLT Mumbai

Udai Yashvir Singh

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