Setting off the balance between a Creditor and Corporate Debtor can be allowed in specific cases – Pramod Kumar Sharma Uniworld Sugars Pvt. Ltd. Vs. ED&F Man Sugar Ltd., London, UK – NCLT Chandigarh Bench
In this case, the major objection of the Resolution Professional is that there is no Express Agreement between the Corporate Debtor and the respondent with regard to the set off of the debit balances with the credit balances. Further, under the IBC, 2016, there is no provision for setting off the balance between a creditor and corporate debtor.
The Adjudicating Authority held that netting off should be allowed in keeping with observations made in the foregoing paragraphs and especially in view of the treatment reflected in the books of accounts of the corporate debtor while determining the liability of the parties with regard to the purchase and sale of sugar. As on the date of initiation of CIRP, after allowing netting off, there is a net payable to the respondent in the accounts of the corporate debtor. Thus, the prayer in the present application for payment of Rs. 69.76 Crores to the corporate debtor plus interest cannot be acceded to. In the result, the application is dismissed and disposed of accordingly.(p32)
