Statutory Dues shall be treated as operational debt under the Insolvency and Bankruptcy Code, 2016 and cannot be subject to waiver by the relevant authorities
By INSOL India Editorial Team Posted On : July 15, 2019
The National Company Law Appellate Tribunal ("NCLAT”), in the matter of RMS Employees Welfare Trust vs. Anil Goel, has observed that the debt due to the Central Government and/or the State Governments arising out of existing law are operational debt under the Insolvency and Bankruptcy Code, 2016 ("IBC”). The NCLAT held that resolution applicants do not have the right to seek a waiver of such debt in order to ultimately decide the amount that is to be repaid in relation to such debt. As per the NCLAT, since such debt is operational debt, the Central Government and/or the State Governments should be paid at least the liquidation value due to operational creditors as per the provisions of the IBC, in relation to such debt.