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Informative

Advance Payment Received by Corporate Debtor for Future Supply of Goods is Operational Debt Under IBC: NCLT

Update / Judgement Date

02 Apr 2025

Source

Taxscan

Author

Team — WCP Legal Desk

Reading Time

1 min read

Insolvency & Bankruptcy Code

NCLT ruled that advance payment received by a corporate debtor for the future supply of goods is an operational debt under IBC. This decision clarifies the definition of operational debt. The ruling provides guidance for insolvency proceedings. This NCLT ruling defines operational debt. This decision is important for insolvency. This judgement provides clarity.