The NCLT, Mumbai bench on March 1, 2022 in the matter of Anil Vora HUF v. Kavya Build-Con Private Limited, rejected the Section 9 application filed by the operational creditor on the ground that a retired partner cannot initiate proceedings u/s 9 of the Insolvency and Bankruptcy Code, 2016 to claim retirement dues against other partners or the firm.

In the instant case, the operational creditor (“Applicant”) filed an application u/s 9 of the IBC, 2016 seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Kavya Build-Con Private Limited (“Corporate Debtor”) 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 lump sum consideration of Rs. 75,00,000 including the amount standing towards the operational creditor’s credit in the books of account.

The NCLT placed reliance on a Supreme Court judgement “Gammon India Ltd V. Neelkanth Mansions and Infrastructure Pvt. Ltd.”, where it was held that since the operational creditor and Corporate Debtor were partners in the Firm, the application filed by the operational creditor is not maintainable and​ was dismissed.

In the present case the NCLT, Mumbai 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.”