Deciding two connected writ petitions arising from a common Industrial Tribunal Award, the Delhi High Court set aside the Tribunal's direction granting hotel workmen a further…
Labour Laws
06/09/20264 min read
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Settlement Breach Agreement between Operational Creditor and CD does not fall Under “Operational Debt” as per Section 5 (21) of the IBC: NCLT
Insolvency & Bankruptcy Code
The Kolkata bench of the National Company Law Tribunal (NCLT) ruled that breaching a settlement agreement between an operational creditor and a corporate debtor does not constitute “Operational Debt” under Section 5(21) of the Insolvency and Bankruptcy Code (IBC), 2016. \r
M/s. Simplex Infrastructure Limited owed M/s. Amrik Cranes and Infrastructure Rs. 3.29 crore for crane services. After defaulting on payments, a settlement was reached to pay Rs. 2.86 crore in instalments, but Simplex breached the agreement. The tribunal found that the claim arose from non-payment under the settlement agreement, not from operational debt as defined by IBC. \r
Consequently, the NCLT dismissed the petition to initiate Corporate Insolvency Resolution Process under Section 9.
