Recently, in the case of V. Umadevi v. Kumaran Gin & Pressing Private Limited, the National Company Law Tribunal, Chennai Bench ruled that advance paid by a party for purchase of goods and/or services does not qualify as “operational debt” under IBC.
The Tribunal opined that the scope of “operational debt” under Section 5(21) was limited to the “provision of goods or services” and not receipt thereof. However, the same appears to be in direct contravention of the Supreme Court’s decision in Consolidated Construction Consortium Limited v. Hitro Energy Solutions Private Limited 2022 SCC OnLine SC 142.
In today’s litigation update, our Principal Associate Sohil Shah and Associate Nidhi Chaudhary examine this case.
Read the full update below:
#PioneerLegal #LawAtPL #NCLT #operationaldebt #operationalcreditor #CIRP #IBC