Appeal Dismissed: Security Deposit Not "Operational Debt" Under Insolvency Code; Pre-existing Dispute Cited.

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....The National Company Law Appellate Tribunal, New Delhi, dismissed an appeal regarding the initiation of Corporate Insolvency Resolution Process (CIRP) as the debt in question did not qualify as "operational debt" under Section 5(21) of the IBC. The Tribunal found that the security deposit in question was not directly linked to any goods or services provided, thus falling outside the scope of operational debt. Additionally, the presence of a pre-existing dispute between the parties rendered the application under Section 9 of the IBC not maintainable, in line with legal precedents such as Consolidated Construction Consortium Limited v. Hitro Energy Solutions Pvt. Ltd. and Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd. The appeal was ultimately dismissed.....