Whether Operational Creditor Includes A Purchaser Of Goods And Services

Introduction:
In a recent judgment, the Supreme Court of India, while keeping up the efforts of plugging various loopholes in Insolvency & Bankruptcy Code, 2016 (“Code”), decided an interesting legal issue relating to the scope of Section 5(20) of the Code, which provides the definition of “operational creditor”.

The Apex Court, in the case of Consolidated Construction Consortium Limited vs. Hitro Energy Solutions Private Limited,¹ was seized of the following legal questions:

1. Whether the Appellant is an Operational Creditor under the Code even though it was a ‘purchaser';
2. Whether the Respondent took over the debt from the Proprietary Concern; and
3. Whether the application under Section 9 of the Code is barred by limitation.