Default in payment under settlement agreement does not come under definition of operational debt: NCLT

The Bench reiterated that that unpaid instalments under a settlement agreement cannot be treated as operational debt as per Section 5(21) of the IBC.

The New Delhi Bench of the National Company Law Tribunal (NCLT) on Monday held that default of payment under a settlement agreement between parties does not fall under the scope of 'operational debt' under the Insolvency and Bankruptcy Code (IBC), 2016 (Ahluwalia Contracts (India) Limited v. Logix Infratech Private Limited).

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