682+ Lawyers are online 
What does operational debt means in concern of vehicle dealer
08-Jun-2023 (In Corporate Law)
Dear sir, I am practising lawyer of supreme court, two days back I sent notice to a automobile company on behalf of a vehicle dealer regarding operational debt I want to be clear what can be operational debt as my client had spent nearly one crore to maintain standard of company to run dealership and within two year of time company announced its winding ,sir the money spent on instruction of company to built and run the dealership can be claim as operational debt by the dealer under ibc 2016.the bs3 vehicles bought by dealer which was banned by supreme court for further sale can be claim as debt by dealer Salary given to employees by dealer for marketing company product can be claimed by dealer as operational debt? Kindly enlighten me on these issues Regards Abdul mabood raza Advocate Supreme Court of India 7379188887
In Col. Vinod Awasthy v. AMR Infrastructure Limited3, the Hon'ble Tribunal while dismissing the Petition instituted under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) at the admission stage itself, decided the issue of whether a flat purchaser would fall within the definition of an 'Operational Creditor' as defined under Section 5(20) of the IBC to whom an 'Operational Debt' as defined under Section 5(21) of the IBC is owed.
The Hon'ble Tribunal observed that the framers of the IBC had not intended to include within the expression of an 'operation debt' a debt other than a financial debt. Therefore, an operational debt would be confined only to four categories as specified in Section 5(21) of the IBC like goods, services, employment and Government dues. The Tribunal held that the debt owed to the Petitioner (a flat purchaser in this case) had not arisen from any goods, services, employment or dues which were payable under any statute to the Centre / State Government or local bodies. Rather, the refund sought to be recovered by the Petitioner was associated with the possession of immovable property.
The Hon'ble Tribunal observed that the framers of the IBC had not intended to include within the expression of an 'operation debt' a debt other than a financial debt. Therefore, an operational debt would be confined only to four categories as specified in Section 5(21) of the IBC like goods, services, employment and Government dues. The Tribunal held that the debt owed to the Petitioner (a flat purchaser in this case) had not arisen from any goods, services, employment or dues which were payable under any statute to the Centre / State Government or local bodies. Rather, the refund sought to be recovered by the Petitioner was associated with the possession of immovable property.
Helpful?
Adv. Prateek Kohli
Delhi | 25+ Answers
CONTACT NOW
Disclaimer: The above query and its response is NOT a legal opinion in any way whatsoever as this is based on the information shared by the person posting the query at lawrato.com and has been responded by one of the Divorce Lawyers at lawrato.com to address the specific facts and details.
Connect with top Corporate lawyers for your specific legal issue
No Comments! Be the first one to comment.
"lawrato.com has handpicked some of the best Legal Experts in the country to help you get practical Legal Advice & help."
