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2023 (2) TMI 1098 - HC - Insolvency and BankruptcyValidity of interim award granted - interim Award dated was based on the premise that the set-off/Counter-Claims raised by the Operational Creditor/appellant herein could not have been filed before the learned Arbitrator, being barred under Section 14 of the Insolvency and Bankruptcy Code, 2016. HELD THAT:- The first ground of challenge is that the alleged admissions mentioned as setoff in Form B submitted before IRP in the proceedings under Insolvency and Bankruptcy Code, 2016 cannot be considered as a determinate amount, unless adjudicated. Moreover, Form B in which the set-off amount is mentioned had been filed before the IRP and not before the learned Arbitrator and cannot be treated as an unequivocal admission in the present proceedings. In AMIT KUMAR CHOPRA VERSUS NARAIN COLD STORAGE & ALLIED INDUSTRIES PVT. LTD. AND ORS. [2014 (3) TMI 1210 - DELHI HIGH COURT], the Co-ordinate Bench of this Court observed that from the aforesaid enunciation of law it is quite clear that equitable set-off is different than the legal set-off; that it is independent of the provisions of the Code of Civil Procedure; that the mutual debts and credits or cross-demands must have arisen out of the same transaction or to be connected in the nature of circumstances; that such a plea is raised not as a matter of right; and that it is the discretion of the court to entertain and allow such a plea or not. The concept of equitable set-off is founded on the fundamental principles of equity, justice and good conscience. Thus, set-off is an admitted amount adjustable from the due being claimed a person. The appellant herein, while giving a detailed statement of claims in Form B before the IRP, has also indicated that the set-off amount has to be paid by it to the respondent. It is a categorical admission by the appellant which requires no further adjudication, and there can be no evidence better than an admission. The scope of interference under Section 37 of the Act, 1996 is extremely limited. Sections 34 and 37 demand respect to the finality of the arbitral ruling and the party autonomy in having chosen to get their issues resolved through alternate forum of arbitration which would be thwarted if the courts were to accept the challenge to the arbitral rulings on factual issues in a regular manner as reiterated in the recent decision of PROJECT DIRECTOR, NATIONAL HIGHWAYS NO. 45 E AND 220 NATIONAL HIGHWAYS AUTHORITY OF INDIA VERSUS M. HAKEEM & ANR. [2021 (7) TMI 1343 - SUPREME COURT] - It was observed by the Apex Court that Section 34 has a different methodology and it cannot be considered as a typical Appellate Jurisdiction. The Award, being supported by reasons, does not call for any interference. The Court is not permitted to independently evaluate the merits of the Award, but must confine its authority to the parameters permitted under the statute. The learned Arbitrator has judiciously exercised its jurisdiction under Section 31(6) of the Act, 1996 to give an interim Award on the basis of admission made by the appellant in Form B by way of set-off. There is no illegality, perversity or irrationality in the findings so returned by the learned Arbitrator which have been accepted by the learned District Judge - appeal dismissed.
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