Facets of Operational Debt under IBC – By Divesh Sawhney & Sanyam Aggarwal

Operational debt under the Insolvency and Bankruptcy Code, 2016 is generally referred to, or has generally been judicially construed as, payment due from the Corporate Debtor for the receipt of goods or services from the supplier/Operational Creditor. But instances galore where the Corporate Debtor was the supplier of goods or services and received some money to that effect, and then failed to honor its commitments i.e., provide the goods or services to the buyer. Can this second episode be categorized as operational debt under the Code?