Case Law Analysis
|National Company Law Appellate Tribunal
Section 5(21) IBC | Profit-Sharing Under O&M Agreement Does Not Constitute Operational Debt: NCLAT
The NCLAT has ruled that profit-sharing payments under an Operation & Management agreement are not operational debt under the IBC, as they arise from commercial collaboration, not goods or services supplied. This clarifies the boundary between revenue-sharing arrangements and true creditor-debtor relationships, impacting how operators and owners structure agreements to avoid insolvency triggers.