Whether license fees or lease rental is operational debt - NCLAT

Last updated: 15 July 2022

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The National Company Law Appellate Tribunal (NCLAT) has ruled that licence fees and lease rentals are to be treated as operational debts. This decision overturns previous judgements and clarifies that a licensor or lessor is an operational creditor. The NCLAT found that the provision of premises for commercial use constitutes a 'service' under the Insolvency and Bankruptcy Code, making outstanding payments operational debt.

Court :
NCLAT, Jaipur

Brief :
The Hon’ble NCLAT full bench overturns its two previous judgements to clarify that Licensor for payment "License Fees" will be treated as Operational Creditor and "License Fees" is an Operational Debt.

Citation :
JAIPUR TRADE EXPOCENTRE PVT. LTD. V. M/S METRO JET AIRWAYS TRAINING PVT. LTD.

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Judgement posted by

FCS Deepak Pratap Singh

Associate Vice President - Secretarial & Compliance (SBI General Insurance Co. Ltd.)

Dear Friends, MyselfFCSDeepak P. Singh ( B.Sc.. LLB, FCS. FIII, CIAFP, CRMP, ID) , A Fellow Member of ICSI, Law Graduate ,Fellow Member of Insurance Institute of India, Certified Independent Director ,Certified Insurance Anti Fraud Professional , Certified Risk Governance Professional ( ICSI-III) and cleared Limited I ... Read more

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