A debt arising from an advance payment given to a corporate debtor for the supply of goods or services would be deemed an operational debt.
Directing the Appellate Tribunal to reconsider the matter, the apex court said that the NCLAT must have notified the bank (Financial Creditor) before closing the CIRP initiated by the NCLT.
In the present case, debt pertaining to unpaid license fee was fully covered within the meaning of ‘operation debt’ under Section 5(21), and the Adjudicating Authority committed an error in holding that the debt claimed by the Operational Creditor is not an ‘operational debt’
Claim of the rental lease will be treated as operational debt under Section 5(21) of the code as per the decision given by the Hon’ble NCLAT.
The issue of existence of a dispute when the application under Section 9 of IBC is filed before the Adjudicating Authority. These actions raise doubt regarding the veracity of the dispute and its pre-existence.
The Supreme Court clarified the code’s object while keeping legislative intent in mind. The court, through this judgement, has struck a balance between creditors’ rights and debtor companies’ remedies.
NCLAT, New Delhi Bench has held that claims towards rent of leasehold property do not fall within the definition of the operational debt under IBC.
The Hon’ble Karnataka High Court on Oct 25, 2019, stayed the insolvency proceedings on the grounds that the Tribunal lacked jurisdiction to adjudicate a claim for damages.