TaxTMI 
TaxTMI 
2019 (6) TMI 1332
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....ce clubbed together and decided by this common Order. 1.1 The Corporate Insolvency Resolution Process of Dishnet Wireless Limited (the 'Corporate Debtor') began on 19.03.2018, pursuant to Admission of Section 10 of IBC application (CP 302/I&BP/NCLT/MB/2018). 1.2 Likewise, Corporate Insolvency Resolution Process commenced in the case of Aircel Ltd. (the 'Corporate Debtor') vide an Order dated 12.03.2018 pursuant to Admission of the Petition filed u/s. 10 of IBC (CP. (IB)-298/MB/2018). 2. The present Miscellaneous Applications in hand are filed by the 'Operational Creditors' M/s. Bharti Airtel Ltd. and M/s. Bharti Hexacom Ltd. (collectively Airtel entities), which entered into 'Spectrum Trading Agreements' with Aircel Ltd. and Dishnet Wireless Ltd. (collectively Aircel Entities) for the transfer of right to use the Spectrum in the 2300 MHz band in favour of 'Airtel Entities'. This Application is filed for a direction to the Resolution Professional (RP) to honour the legal and equitable right of 'Airtel entities' to apply set off on account of mutual dealings for an amount of approximately INR 112 Crores during the Corporate Ins....
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....i Airtel Limited (Buyer) in respect of the Service Area of Andhra Pradesh) Ref: 1. Guidelines for Trading of Access Spectrum dated 12.10.2015 ('Trading Guidelines') 2. Spectrum Trading Agreement dated 08.04.2016 in respect of the License Service Area of Andhra Pradesh ("Agreement") 3. Joint Trading Intimation date 06.06.2016 4. DoT Letter No. 1000/21/2016-WR dated 22nd June, 2016 Dear Sir, This is in reference to above referred letter referred to in SI. No.4 ('DoT Letter') sent by the Hon'ble Department of Telecommunications ('DoT') on the captioned subject inter alia calling upon the Seller for payment of the provisional dues as noted therein. In line with the DoT Letters, the Seller are directed to pay a sum of Rs. 575547354/- towards total outstanding License Fee and Rs. 1,08,19,419/- towards total outstanding SUC. In this regard, as agreed we as Buyer on your behalf would be: 1. Paying the said Rs. 18,21,49,187/- towards principle License Fees dues vide Pay Order; 2. furnishing a Bank Guarantee in respect of the said Rs. 39,33,98,168/- towards interest, penalty ....
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....l Entities against Aircel Entities:- Name of Entity Net receivable by Airtel Entities from the Aircel Entities Bharti Airtel Limited - Aircel Limited 31,45,47,499 Bharti Hexacom Limited -Aircel Limited 42,08,97,296 Bharti Airtel Limited - Dishnet Wireless Limited 58,28,80,156 Bharti Hexacom Limited - Dishnet Wireless Limited 7,51,17,655 Total (Approximately) 139.34 Crores. 7. The Aircel Entities (Seller/Corporate Debtor) also owed an amount of INR 5.85 Crores to Telenor, which was merged with Bharti Airtel Ltd. vide order dated 08.03.2018 passed by the Hon'ble NCLT, Principal Bench, New Delhi, effective from 14.05.2018. Therefore, the total amount owed by Aircel Entities (Seller) to the Airtel entities (Buyer) was approx. INR 145.20 Crores (i.e. INR 139.34 Crores owed to the Airtel Entities + INR 5.85 Crores owed to Telenor). To summarise, the Aircel Entities (Seller) is to pay a sum of Rs. 139.34 Crores to Airtel Entities (Buyer) in respect of Unpaid-Invoices which were in the nature of Operational Debt being related to services provided and inter-connection agreements executed between the parties. Under the Insolvency Code, the Airtel En....
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....Gs would stand cancelled and the parties would not be able to use the BGs for any purpose whatsoever. 8.1 Consequently, the RP of the Aircel Entities (Corporate Debtor) being aware of the aforesaid order of the TDSAT, pursued the Airtel Entities to release the BGs. On 31.07.2018, the Airtel Entities (Buyer/Operational Creditor) communicated their willingness to pay the BG amounts immediately upon the return of the BGs by the DoT and the release of their credit lines by Axis Bank, subject to their right to claim set off of the net undisputed principal amounts owed by the Aircel Entities (Corporate Debtor) to the Airtel Entities (Operational Creditor) i.e. approx. 112 Crores. The Hon'ble TDSAT's order dated 09.01.2018 regarding release of bank guarantees was upheld by the Hon'ble Supreme Court on 28.11.2018 and then on 08.01.2019. 9. The Airtel Entities (Buyer/Operational Creditor), acting in compliance with the Hon'ble Supreme Court's order, released the withheld amount of approximately INR 453.73 Crores in the following manner: i. Payment of INR 341.80 Crores (i.e. 75% of the withheld amount) to Aircel Entities on 10.01.2019; and ii....
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....eaded that the Aircel Entity had failed to identify that which particular Sub-section or Sub-clause of Section 14 restricts the set-off as claimed. According to the arguments it is nothing but a moonshine defence without any legal basis. Further clarified that the retained amount of Rs. 453.73 Crores was not in the nature of Security Interest, hence set-off of the retained amount cannot be subjected to Moratorium. ii. Claim Form B under the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016: This form was submitted as a lodgement of claim wherein set-off of mutual credits or mutual debits are to be informed and accordingly to be claimed during Corporate Insolvency Resolution Proceedings. Relevant portion of the claim form is referred as under:- "Entry 8": DETAILS OF ANY MUTUAL CREDIT, MUTUAL DEBTS, OR OTHER MUTUAL DEALINGS BETWEEN THE CORPORATE PERSON AND THE OPERATIONAL CREDITOR WHICH MAY BE SET-OFF AGAINST THE CLAIM Declaration: [Please state details of any mutual credit, mutual debts, or other mutual dealings between the corporate person and the operational creditor which may be set-off against the claim.] ....
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....s that CIRP proceedings and the Liquidation proceedings are two faces of the same coin, therefore, even at the time when the CIRP proceedings are in progress the terms & conditions of Liquidation proceedings has to be taken into account. v. A vehement reliance is placed by Learned Senior Advocates on Regulation 29 of the IBBI (Liquidation process) Regulations, 2016,for reference, reproduced below :- 29. Mutual credits and set-off. Where there are mutual dealings between the corporate debtor and another party, the sums due from one party shall be set off against the sums due from the other to arrive at the net amount payable to the corporate debtor or to the other party.' Illustration: X owes Rs. 100 to the corporate debtor. The corporate debtor owes Rs. 70 to X. After set off, Rs. 30 is payable by X to the corporate debtor. The reason for placing reliance on this Regulation is that a mutual set-off is mandated in the Insolvency Code, therefore, the Airtel Entities have rightly claimed for set-off which was a legal entitlement duly approved by the aforementioned Regulation. vi. Further to buttress their a....
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....ained before the Official liquidator or in answer to a claim of the Official Liquidator in a suit filed by him". 14. The Applicant justifies its act of setting off by placing further reliance on the judgment dated 02.12.1998 of Gujarat High Court in the matter of Bank of Maharashtra v. Official Liquidator, Navjivan Trading Finance (P.) Ltd. [1999] 96 Comp. Cas 234, it was held that: "the question of fraudulent preference also cannot depend on the fact whether the demand is made by the creditor of the company (in liquidation) or a demand is first made by the company (in liquidation) in respect of its claims and the set off is pleaded by the company's debtor in respect of amounts due from the company to it. In the present circumstances, obviously, had the Bank demanded for payment of sum due to it under overdraft, the company, (in liquidation) was entitled to claim set off against the amount due under the FDRs notwithstanding that the same were not hypothecated as security for discharge of the debts due. If that could be done we see no reason, why the bank could not claim the set off because the company (in liquidation) has taken the initiative to call upon the bank t....
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.... it will be paid later on when Resolution Applicant shall come in picture or otherwise during the waterfall mechanism if the Company goes into liquidation. As held in the case of M.S. Fashions Ltd. v. Bank of Credit & Commerce International S.A. (In liquidation) [1992 M. No. 4775]: "The statutory set off is not something which B.C.C.I. can, as it were, place in a suspense account. It operates to reduce or extinguish the liability of the guarantor and necessarily therefore operates as in effect a payment by him to be set against the liability of the principal debtor. A creditor cannot sue the principal debtor for an amount of the debt which the creditor has already received from a guarantor. This is subject, however, to one point, which has been called "the charge point" to which I now turn.". 18. That in addition to the case laws referred above, from the side of the Applicant few more case laws have also been referred from where relevant portions also read during the course of hearing, however, keeping brevity in mind those paragraphs not reproduced but citations quoted are as hereunder:- Case Laws referred:- (1) Ex parte BARNETT, In re 1874 J....
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....dure, it enables a defendant to require his cross-claim (even if based upon a wholly different subject matter) be tried together with the Plaintiff's claim Instead of having to be the subject of a separate action. In this way it ensures that judgment will be given simultaneously on claim and cross-claim and thereby relieves the Defendant from having to find the cash to satisfy a judgment in favour of the plaintiff (or, in the 18th century, go to a debtor's prison) before his cross claim has been determined. (iii) Bankruptcy/Insolvency Set Off "Bankruptcy Set Off, on the other hand, affects the substantive rights of the parties by enabling the bankrupt's creditor to use his indebtedness to the bankrupt as a form of security. Instead of having to prove with other creditors for the whole of his debt in the bankruptcy, he can set off pound for pound what he owes the bankrupt and prove for or pay only the balance. In Foster v. Wilson (1843 12 M. & W. 191, 204, Parke B. said that the purpose of insolvency set off was "to do substantial justice between the parties". Although it is also often said that the justice of the rules is obvious, it is worth not....
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.....2 The claims of set-off thus arise out of the following dealings/transactions between the Airtel Entities and Aircel Entities: (a) Operational Service agreements' (b) SMS service agreements' (c) Interconnect usage agreements. It is pleaded that the claims filed by Airtel Entities have been verified by the RP, but according to R.P. the stage of admission of claims had not reached, as the stage ought to be 'Liquidation' proceedings and not Corporate Insolvency Resolution Process. It is pleaded that it is significant to note that at the time of filing the claim form, Airtel Entities did not seek any set-off (legal or equitable) from the amount withheld for provision of the BGs. 19.3 Even assuming if the RP were to admit the claims, it would not entitle Airtel Entities to any priority over the other creditors as Airtel will remain as an Operational Creditor for the aggregate amount of the admitted claims. As particularly set out hereinafter, Airtel Entities are not entitled to claim legal or equitable set-off as attempted to the extent of Rs. 112 Crore, therefore, by doing so, the Airtel Entities put themselves in an advantageous ....
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....is not denied to the petitioner. In order end disobedience and to achieve that end the respondent is directed to return the three bank guarantees which were supplied by the petitioner pursuant to interim order dated 03.06.2016 passed in T.P. No. 38 of 2016, within one week from today. If that is not done by the respondent then the three bank guarantees shall stand cancelled and shall no longer be used by the respondent for any purpose whatsoever." This Court, on 23.07.2018, ordered that the said order dated 16.07.2018 shall be subject to the outcome of the appeal. By an another order dated 28.11.2018, this Court reiterated that the said order will operate in the meanwhile and stated that a sum of Rs. 298,00,00,000/- (Rupees Two Hundred and Ninety Eight Crores) would be refunded by the DoT. Given the aforesaid, the present application is allowed in the following terms: All parties including Axis bank and Bharti Airtel Ltd.) to proceed on the basis that the three bank guarantees referred to in the opening paragraph of this Court's order dated 28.11.2018 and in the TDSAT order dated 16.07.2018 (particulars at page 18 of I.A. No. 180450 of 2018) stands ca....
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....le set-off can be claimed is no longer res integra. The Hon'ble Supreme Court in a catena of cases and even the division bench of the Bombay High Court have laid down the following principles for governing equitable set-off: (a) the right of set-off exists not only in cases of mutual debits and credits, but also where cross-demands arise out of the same transaction; (b) a plea in the nature of equitable set-off is not available when the cross-demands do not arise out of the same transaction and not connected in its nature and circumstances; (c) a wrongdoer who has wrongfully withheld moneys belonging to another cannot invoke any principles of equity in his favour and seek to deduct therefrom the amounts that have fallen due to him; (d) all cross-demands are to arise out of the same transaction or the demands are so connected in the nature and circumstances that they can be looked upon as a part of one transaction; (e) both the parties must fill the same character in respect of the two claims sought to be set-off or adjusted. 19.10 On this issue reliance was placed on the following decisions:- (i) Jitendra Kumar Khan v. Pe....
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....sting law at that point of time was related to "Winding Up of Companies" under Companies Act, which now stood replaced by this Code to ensure that the Financial Creditors have primary role to play for expeditious recovery of money from the Debtors. In this case the Airtel Entities have already filed claims on Form-B before the RP in the month of March, 2018 as an Operational Creditor and now claiming set-off which is contrary to the object of IBC. For its claim an Operational Creditor is required to be in the queue with other Operational Creditors so that no Creditor shall have preference over other Creditors. By this set-off the Operational Creditor is recovering its Debt which is nothing but upsetting the queue and suo motu enjoying preference treatment, it is pleaded. If claim is allowed to Airtel Entities to retain Rs. 112 Crores, naturally the 'Airtel Entities' would get preference over other Creditors of Aircel Entities. With these remarks Learned Counsel has concluded his arguments. (D) Submissions by the Resolution professional: 20. Representing Resolution Professional Ld. Senior Advocate Mr. Ravi Kadam, at the outset submitted that this application has been f....
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....fault "and" the moratorium on initiation and continuation in legal proceedings including debt enforcement action ensures a stand still period during which creditors cannot resort to individual enforcement action which may frustrate the object of the Corporate Insolvency Resolution Process" 20.4 The above report was drafted in March, 2018. The intent of the legislature was always the same. In the report of the Bankruptcy Law Reforms Committee drafted in November, 2015, the discussion on the aspect of moratorium was that, "the motivation behind the moratorium is that it is value maximising for the entity to continue operations even as viability is being assessed during the IRP. There should be no additional stress on the business after the public announcement of the IRP. The order of the moratorium during the IRP imposes a stay not just a Debt Recovery actions, but also any claims or expected claims from old law suits or a new law suits for any manner of recovery from the entity". 20.5 In support of the arguments reliance was placed on following judgments:- (a) Indian Overseas Bank (supra). (b) Karam Chand Thapar & Bros. (supra) (c) K. Sashid....
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....mple language, although the transaction apparently was little complex. Admittedly 'Airtel Entities' is an Operational Creditor of 'Aircel Entity' undisputedly under Insolvency. Somewhat situation is reverse in this case; to the extent that before this Operational Creditor (Airtel Entity) could ask for its claim of Operational Debt due to be recovered from the Debtor Company (Aircel Entity), vide an order of the Hon'ble Court, this Creditor was ordered to make a payment to the Debtor Company. Why 'Airtel Entity' was an Operational Creditor is because it has to recover an Operational Debt of Rs. 112 Cr (mentioned the figure to simplify the understanding of transaction) from Aircel Entity (Corporate Debtor) . On the other hand there was another transaction (Spectrum Trading Agreement) owing to which Airtel Entity was to make a payment of retention money to Aircel Entity. That amount was kept in the shape of Bank Guarantees of Rs. 453.73 Crores, being DoT was involved. So the situation was that Aircel Entity (Corporate Debtor) was to recover this amount from Airtel Entity (Applicant/Operational Creditor). The Hon'ble Courts (TDSAT and Supreme Court) have....
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....ifiable. In normal course of business transaction if an amount is payable by one party to another party, the net amount is paid after factoring of payment due minus payment recoverable. Had it been a case where there was no Insolvency proceedings were involved, then this simple principle of netting-off as per normal accounting principle would have been applied. 21.6 In the back drop of the above narrated factual matrix, is it just, fair, equitable and reasonable to ask Airtel to make the payment to Aircel the sum of Rs. 453/-Cr. without netting the amount recoverable from Aircel of Rs. 112/- Cr. Netting entails off-setting the value of multiple payments due to be exchanged between two or more parties. It can be used to determine which party owed money in a mutual agreement. It is a netting between account receivable and account payable. It applies in a situation when there is an existence of two-way flow of money in a composite dealing between those two parties, such as, an example of customer and supplier. Also for example in this case, the two 'Entities' were having two type of dealing between themselves. In one dealing the Airtel Entity was a Purchaser of Spectrum hen....
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....a) an important observation was that, quote "On principle and in the interests of fairness and justice, we think that a party against whom the company has instituted a suit, should not be prevented from establishing that on a proper taking of the account between the company and the party i.e., after adjusting mutual credits and debit no amount is due the company or that the extent of its liability is more or less reduced. When the company has made a claim, any plea which has the effect of reducing the claim if successful; would be a plea in defence. It may be for certain purposes as for example, for court-fees a written statement containing a plea of set off or counter-claim is treated as a cross-suit, but that is not conclusive of the matter. There can be no doubt that the pleading by the defendant is defensive in character. If it is so, S.171 cannot apply." unquote. In this case there was a discussion of Sec. 47 of Presidency Town Insolvency Act as well as Sec. 46 of Provincial Act for the ruling that it would be unjust if the Official Liquidator demand or recover full money due from a debtor, but that very Debtor, if happens to be a Creditor of the Company must rest the counter ....
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....al Insolvency Act should apply and only that amount which is ultimately found due from him at the foot of the account in respect of mutual dealings should be recoverable from him and not that the amount due from, him should be recovered fully while the amount due to him from the company in liquidation should rank in payment after the preferential claims provided under Section 530. We find that the same view has been taken by the English Courts on the interpretation of the corresponding provisions of the English Companies Act, 1948 and since our Companies Act is modelled largely on the English Companies Act, 1948, we do not see any reason why we should take a different view, particularly when that view appears to be fair and just. We may point out that Gore Browne in his book on company law, 43rd Ed., at pages 34-14 also confirms this view : "Indeed, all claims provable in the winding up may be the subject of set off, provided that there is mutuality." Moreover, we find that the observations of the House of Lords in National Westminster Bank Ltd. v. Halesowen Presswork and Assemblies Ltd. are also to the same effect. We may also usefully refer to the observations of Sir Ernest Pollo....
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....as also placed reliance on a decision of 'House of Lords' (Lord Keith, Lord Ackner, Lord Lloyd, Lord Nicholls) in the matter of Stein (supra) wherein facts were stated in the opinion Lord Hoffmann in an Appeal from the 'Court of Appeal' wherein the Issue was set-out as under :- "1. The issues If A and B have mutual claims against each other and A becomes bankrupt, does A's claim against B continue to exist so that A's trustee can assign it to a third party? Or is the effect of section 323 of the Insolvency Act, 1986 to extinguish the claims of A and B and to substitute a claim for the net balance owing after setting off the one against the other? And if the latter is the case, can the trustee assign the net balance (if any) before it has been ascertained by the taking of an account between himself and B? If yes, is that what the trustee in this case has done? These are the issues in this appeal." The law related to Bankruptcy set-off was discussed and also compared with statutory legal set-off. Only those portions which appealed me (with permission) are reproduced so that the present conundrum can get resolved. About 'Bankruptcy set-....
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....arty, it does not mean that the sums in question must have been due and payable, whether at the bankruptcy date or even the date when the calculation falls to be made. The claims may have been contingent at the bankruptcy date and the creditor's claim against the bankrupt may remain contingent at the time of the calculation, but they are nevertheless included in the account. I consider next how this is done. 6. Quantifying the cross-claims How does the law deal with the conundrum of having to set off, as of the bankruptcy date, "sums due" which may not yet be due or which may become owing upon contingencies which have not yet occurred? It employs two techniques. The first is to take into account everything which has actually happened between the bankruptcy date and the moment when it becomes necessary to ascertain what, on that date, was the state of account between the creditor and the bankrupt. If by that time the contingency has occurred and the claim has been quantified, then that is the amount which is treated as having been due at the bankruptcy date. An example is Sovereign Life Assurance Co. v. Dodd GBP1,170 on the security of his policies. The company....
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....ds "or other mutual dealings". I shall consider first whether "mutual debts" existed at the relevant time between the company and the Crown, treating HM Customs and Excise and the Secretary of State as both being manifestations of the Crown." 21.15 There is one more important decision pronounced by England and Wales High Court (Chancery Division) in the case of Kaupthing Singer, Fiedlander Ltd. (supra). Hon'ble Justice Norris has made an observation vide Para 9 of the said Order as follows:- "9. The general and long established rule in liquidations was that where, before a company went into liquidation, there had been mutual credits, mutual debts or mutual dealings between the company and any providing creditor then an account was to be taken of what was due to each party from the other in respect of those dealings, the sums due from one party being provable in the liquidation or being recoverable by the liquidator as part of the assets (depending on how the balance was struck). In Re M.S. Fashions [1993] Ch 425 Hoffman L J fat 432F ff) noted three established features of the rule. (a) its application was mandatory ('the mandatory principle'). In the Court o....
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.... There is no similar machinery for quantifying contingent or unascertained claims against the creditor because it would be unfair upon him to have his liability to pay advanced merely because the trustee wants to windup the bankrupt's estate. (f) Not only is the insolvency set-off mandatory, it is "self-executing" i.e. not dependent upon the taking of any procedural step such as lodgement of a proof." Few important points have been decided that a Creditor who owes money to a Corporate Debtor Company on a separate account may resort to self-help by setting off the Debt due to him against his own indebtedness to the said Company, thus ensuring payment of his claim protanto ahead of other creditors. The Hon'ble Court was of the view that not only the Insolvency Set off is mandatory but it is also 'self-executing". The observation was to the extent that there is no requirement of even lodgement of a proof. However, in the present case, the Airtel Entities have lodged their claim and the said lodgement of claim is not in dispute. 22. In the foregoing paragraphs, the basic principles of set-off as per prevalent accounting principles are discussed and noticed....
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....xistence of a reverse position of accounts in which the Corporate Debtor is supposed to owe a huge liability, but against that the said Corporate Debtor is to recover an amount from its Debtor. If set-off is not granted in this reverse situation then the Resolution Applicant may or may not propose a correct Resolution Plan after seeing the said huge liability without analysing the benefit of set-off of credit amounts. To make myself clear it is necessary that a Resolution Applicant must be aware of the correct outstanding balances appearing on the date of commencement of Insolvency in the Balance Sheet of a Corporate Debtor. It is necessary to communicate to Resolution Applicant a true and correct picture of outstanding balances in the Balance Sheet, ought to be net balances and not the gross balances. Only then a Resolution Applicant can be sure about his money position that the proposed plan is economically viable to him. Rather, it is required to make the law clear and unambiguous that there ought not to be any controversy whether a gross or a net amount is to be taken into account for submission of a Resolution Plan. While deciding this type of issue if the Tribunal leave a sco....
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....he present situation that a sum of Rs. 112 Crores, although said to be under ownership of the Corporate Debtor, but the right is arising out of a contractual arrangement. Unpaid invoices are nothing but in the nature of a contractual obligation emerging from the services provided. The unpaid invoices are the asset of the Operational Creditor i.e. Airtel Entities, although not in direct control/possession of the Corporate Debtor but out of the ambits of Section 18(l)(f), being an asset under contractual obligation of payment by the Corporate Debtor to the Operational Creditor. Interestingly, the language of Explanation (a) and the language of Section 14(l)(d) are very much identical. On co-joint reading of these two sections a message is conveyed that if an asset is in possession of the Corporate Debtor then inspite of the applicability of "Moratorium", if that asset came into existence out of a contractual obligation then set-off or adjustment is required to be allowed so that the Resolution Professional be not entitled to take control over such an asset. In the recent past a problem was posed to NCLT, Chandigarh Bench in the case of Weather Makers Pvt. Ltd. v. Parabolic Drugs Ltd.....
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....n Process. Otherwise also, while lodging Form No. B it is obvious that inter se mutual debit and credit entries are supposed to be reflected in the Statement of Accounts to arrive at a figure of claim amount. Therefore, it is wrong to say that a preference is given to a particular Operational Creditor. This method of inter se adjustment ought to be available to all other Creditors (Financial/Operational), naturally if an amount is available for mutual adjustment. 24. While reading the judgment of Swiss Ribbons we have noticed that at the time of filing of Resolution Plan, the Resolution Applicant is to take into account the amount of set-off in terms of Section 30(2)(b) of The Code, which provides that: for the repayments of the debts of operational creditor shall not be less than the amount to be paid to the operational creditor in the event of liquidation of the Corporate Debtor u/s. 53 of the Code. Interestingly, it is made clear in Section 30(2) that the Resolution Professional shall examine Resolution Plan and confirm that such Resolution Plan wherein made a provision for the payment of the debts of Operational Creditors which shall not be less than the amount to be paid to....
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....n. So the argument is that let the Liquidation stage come in this case for netting of the claims but not before that stage. It is also vehemently pleaded that all the decisions as relied upon by the Petitioner revolve around the Liquidation process and the Liquidation proceedings thereafter. In fact, the case laws were of that era when there was no system of submission of Resolution Plan and the only option available was the start of Liquidation. Due to this reason, when there was no system of restructuring or revival of a Debtor Company under financial stress and the only statute available was law of Liquidation, therefore, naturally the case laws available on this subject is confined to Liquidation process. However, the unanimous decision is in favour of granting of set off so that only the net claims of the respective parties be settled. Thus, a conclusion can be drawn that the doctrine of set off or the accounting principle of netting off is an accepted principle to be adopted by the concerned parties. 26. There was argument and counter argument in respect of the term "mutual dealings" used in regulation 29 of IBBI (Liquidation Process Regulation). This terminology has also ....