‘Return on advance payments’ not an operational debt, NCLTNovember 2 2018
The scope and width of the definition of an ‘operational debt’ under the Insolvency and Bankruptcy Code is continually tested by courts. The scope has been narrowed by the NCLT Kolkata Bench by excluding ‘return on advance payments’ from this list.
SHRM Biotechnologies Pvt. Ltd. (operational creditor) had sought the help of VAB Commercial Pvt. Ltd. (corporate debtor) for arranging an investor to enter into a joint venture with. For this purpose, an advance of Rs. 3,00,000 was paid by SHRM to VAB. The terms . . .
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