Case Law Analysis
|National Company Law Appellate Tribunal
Operational Debt Under IBC | Advance Payment Under Consortium Agreement Constitutes Operational Debt: NCLAT
The NCLAT has ruled that advance payments made under a consortium agreement for goods supply qualify as operational debt under Section 5(21) of the IBC, even when payment obligations are structured between consortium members rather than directly with a corporate debtor. This expands the scope of operational creditors in complex supply chains and clarifies that inter-se financial arrangements do not negate the existence of a debt arising from a transaction in the ordinary course of business.