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

Bench: 2 — Sanjiv Khanna, S.V.N. Bhatti

In Brief

Bharti Airtel challenged a ruling preventing it from setting off Rs.112.87 crores owed by Aircel entities during Aircel's insolvency proceedings. Airtel had furnished bank guarantees for Aircel's spectrum purchase and claimed the right to adjust amounts it owed against what Aircel owed it. The Supreme Court held that the IBC does not permit statutory or insolvency set-off during the Corporate Insolvency Resolution Process. Only contractual set-off (agreed before insolvency) and transactional set-off (for closely connected transactions) are exceptions. Since Airtel's spectrum-related liability arose after insolvency commenced and differed from Aircel's interconnect charges, set-off was impermissible. The Court dismissed Airtel's appeals.

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Insolvency and Bankruptcy Set-off Corporate Insolvency Resolution Process Moratorium Spectrum Trading Bank Guarantees Contractual Set-off Equitable Set-off Insolvency Law

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