# In the matter of Bharat Heavy Electricals Limited vs. Zillion Infraprojects Pvt. Ltd. FAO (COMM) 66-2021 & CM APPL. 33889-2020

> HC judgment dated 2023-02-21. Citation: TCN-2023-HC-00080. The case involves an appeal against an order dated 10.11.2020 by the District Judge, Commercial…

- **Court:** HC
- **Order date:** 21 Feb 2023
- **Citation:** TCN-2023-HC-00080
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/bharat-heavy-electricals-limited-vs-zillion-infraprojects-pvt-ltd-fao-dd8ff2c4

## Summary

### Background

The case involves an appeal against an order dated 10.11.2020 by the District Judge, Commercial Courts-03, Patiala House Courts, which dismissed objections under Section 34 of the Arbitration and Conciliation Act, 1996, against an interim award dated 13.08.2020 passed by the learned Arbitrator. The dispute arose from a contract awarded to the respondent by the appellant for erection, testing, commissioning, and trail operation of boilers. Disputes led to arbitration, and the appellant moved an application under Section 14 of the Insolvency and Bankruptcy Code, 2016, due to CIRP proceedings against the respondent. The Arbitrator adjourned proceedings sine die but later resumed them. The respondent filed a Statement of Claim, and the Arbitrator granted an interim award

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## Facts

Bharat Heavy Electricals Limited (BHEL), the appellant, invited tenders for erection, testing, commissioning, and trail operation of boilers. The contract was awarded to M/S. Zillion Infraprojects Pvt. Ltd. (Zillion), the respondent, for Rs. 380,000,000/-. Disputes arose, and Zillion invoked arbitration. BHEL moved an application under Section 14 of the Insolvency and Bankruptcy Code, 2016, due to CIRP proceedings against Zillion. The Arbitrator adjourned proceedings sine die but later resumed them. Zillion filed a Statement of Claim for Rs. 22,24,10,826/-. BHEL submitted claims in Form B before the Interim Resolution Professional (IRP), admitting a set-off amount of Rs. 69,03,671.85/-. The Arbitrator granted an interim award for this amount. BHEL challenged the

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## Issues and analysis

### Issue 1: Whether the interim Award dated 13.08.2020 was based on the premise that the set-off/Counter-Claims …

**Ratio:** The principle of set-off allows an admitted amount to be adjusted from the due being

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**Reasoning:** The court reasoned that the appellant's admission of a set-off amount in Form B before

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**Interpretation:** The court interpreted the concept of set-off as an admitted amount adjustable

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**Application:** The court applied the principle of set-off to the facts of the case, holding

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## Parties

- **Judges:** SURESH KUMA…; NEENA BANSAL…
- **Appellants:** Bharat Heavy…
- **Respondents:** M/S ZILLION…
- **Other parties:** Kohi…
- **Advocates:** Mani G…; Iti Pa…; +3 more

## Timeline

- **2020-11-10 — Order of Distr…**: The learned District Judge, Commercial Courts-03, Patiala House Courts, dismissed the…
- **2020-08-13 — Interim…**: The Sole Arbitrator allowed the application of the respondent/Claimant and granted an…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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