Advance is operational debt

The NCLAT, Principal Bench, has clarified that payments made as advances towards the supply of goods under a consortium arrangement are capable of constituting"operational debt" under the Insolvency and Bankruptcy Code, 2016. 

Reversing the NCLT's order, the Appellate Tribunal held that the consortium agreement created clear inter se commercial obligations between the parties and that the unpaid advance bore a direct nexus with the provision of goods.