Synergy Marketing Inc v. Siddharth Intercrafts (P) Ltd.

INSOLVENCY AND BANKRUPTCY CODE, 2016,

--Person --Filing of insolvency petition by sole proprietary concern Whether sole proprietary concern includible in definition of person --Whether CIRP petition maintainable--Where sole proprietary concern was not included in the definition of “person” under section 3(23) of the Code, then, petition filed by sole proprietary concern in the capacity of operational creditor could not be maintained.--Corporate debtor committed default in making payment against invoices raised for supply of goods by SMI, a sole proprietary concern. Thus, SMI filed petition against the corporate debtor in the capacity of an operational creditor for initiating CIRP. However, corporate debtor raised a question as to whether a sole proprietary concern is entitled to maintain a petition under the provisions of the IBC. Held: It is evident that an operational creditor as defined under the provisions of the IBC should be a person as defined under section 3(23) in order to maintain a petition under section 9. In the absence of a sole proprietary concern not being included in the definition of a 'person', petition under section 9 could not be maintained.

Insolvency and Bankruptcy Code, 2016, Sections 3(23) & 9

REFERRED : Svapn Constructions v. IDPL Employees Cooperative Group Housing Society Ltd. (2006) 127 DLT 80