BHARTI AIRTEL LIMITED AND ANOTHER versus VIJAYKUMAR V. IYER AND OTHERS

BHARTI AIRTEL LIMITED AND ANOTHER versus VIJAYKUMAR V. IYER AND OTHERS

The IBC is a self-contained code and statutory or insolvency set-off (as permitted by Regulation 29 of the Liquidation Regulations or Order VIII Rule 6 CPC principles) does not apply during the Corporate Insolvency Resolution Process (Chapter II Part II). Only (i) contractual set-off effective before or on commencement of CIRP, and (ii) a narrow transactional/equitable set-off where claims and counterclaims are so closely linked as to be one and the amount is quantifiable and clearly established, are permissible; accordingly the appellants’ claim to statutory/insolvency set-off in CIRP was rejected and the appeals were dismissed.

Parties
Appellant: Bharti Airtel Limited; Appellant: Bharti Hexacom Limited; Respondent: Vijaykumar V. Iyer and Others
Jurisdiction
India
Judgment Date
03 January 2024
Procedural Posture
Civil Appeal / Final Judgment (appeal Disposed)
Outcome
Appeals dismissed
Legal Topics
Set Off, Corporate Insolvency Resolution Process, Liquidation, Moratorium, Contractual Set Off, Equitable/transactional Set Off, Insolvency Set Off
Insolvency and Bankruptcy Company Law Civil Procedure Set Off Corporate Insolvency Resolution Process Liquidation Moratorium Contractual Set Off +2 more

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Parties

Bharti Airtel Limited

Appellant

Bharti Hexacom Limited

Appellant

Vijaykumar V. Iyer and Others

Respondent

Procedural Posture

Civil Appeal / Final Judgment (appeal Disposed)

Legal Issues

  1. 1 Whether statutory or insolvency set-off is available in the Corporate Insolvency Resolution Process (CIRP) when the Resolution Professional takes custody under s.25(2)(a) of the IBC
  2. 2 Whether Regulation 29 of the Liquidation Regulations or Order VIII Rule 6 CPC applies to CIRP
  3. 3 Whether any exceptions to the bar on set-off in CIRP exist (contractual or equitable/transactional set-off)

Ratio Decidendi

The IBC is a self-contained code and statutory or insolvency set-off (as permitted by Regulation 29 of the Liquidation Regulations or Order VIII Rule 6 CPC principles) does not apply during the Corporate Insolvency Resolution Process (Chapter II Part II). Only (i) contractual set-off effective before or on commencement of CIRP, and (ii) a narrow transactional/equitable set-off where claims and counterclaims are so closely linked as to be one and the amount is quantifiable and clearly established, are permissible; accordingly the appellants’ claim to statutory/insolvency set-off in CIRP was rejected and the appeals were dismissed.

Court Disposition

Appeals dismissed

Orders

  • Civil Appeal Nos. 3088-3089 of 2020 dismissed
  • No order as to costs