JUDGMENT :

I. P. Mukerji, J.

1.This is an appeal of Kolkata Metropolitan Development Authority. It arises out of quite interesting circumstances. The appellant applied before the court to set aside its order dated 13^th December, 2022 by which it had been directed to furnish cash security for Rs.69,43,73,572.88/- to obtain stay of an arbitral award and the execution proceedings in connection with it. By this application the appellant tried to plead that its counter-claim of Rs.80,66,81,775/- should be set off against the arbitral award enjoyed by the respondent. Now this counter-claim had been raised in the arbitral proceedings. Since the respondent had been “admitted into CIRP” under the provisions of the Insolvency and Bankruptcy Code, 2016, its counter-claim of Rs.80,66,81,775/- against the respondent could not be pursued as a consequence of the moratorium imposed under Section 14 of the Insolvency and Bankruptcy Code. It appears that on 23^rd January, 2023 the resolution professional wrote to the appellant that its claim of Rs.80,66,81,775/- had been admitted in the resolution plan. On the strength of this development the appellant applied before the learned trial judge to set off the admitted counter claim against the security.

2. By a judgment and order made on 25^th April, 2023 the learned judge found it “unfortunate” that a “counter-claim remedy lies under the code and the receivables if any have to be decided as per the resolution plan… the arbitral award has to be enforced in the way as it stands”. The application was dismissed. Time to deposit Rs.69,43,73,572.88/- to obtain stay of the arbitral award was extended by two weeks failing which an order in terms of prayer (h) of the tabular statement in the execution application EC/434/2024 would follow.

3. The award debtor Kolkata Metropolitan Development Authority appeals against this order to us.

4. At the outset Mr. Jayanta Kumar Mitra, learned senior counsel appearing for the respondent contended that this order passed in an application under Section 36 of the Arbitration and Conciliation Act, 1996 as consequential to the application for setting aside of an arbitral award is non-appealable. Simply put the impugned order has refused to reduce the security ordered to be furnished to the court to obtain stay of the award and its execution. Section 37 of the Arbitration and Conciliation Act, 1996 read with Section 13 and Commercial Courts Act, 2015 does not permit an appeal from such an order, learned counsel submitted.

5. One should decide the appealability of an order from the substance of the order. The section under which the order is passed is not material. In the Arbitration and Conciliation Act, 1996 the right to appeal is identified in relation to the section under which an order is passed. The appealability of an order is also to be appreciated in the context of the subject matter. In my opinion, if the appellant had succeeded in its application before the learned single judge the effect would have been adjustment of a part of the award resulting in its reduction by setting off of the counter-claim against the award. In that event part of the award would have stood set aside. That in my opinion is very much appealable under Section 37 of the Arbitration and Conciliation Act, 1996 read with section 13 of the Commercial Courts Act, 2015. Therefore, the preliminary objection of learned counsel for the respondent fails.

6. Now the facts in some detail.

7. There were arbitral proceedings between the parties. On 20^th November, 2019 the respondent was admitted in corporate insolvency resolution process by the National Company Law Tribunal, Kolkata Bench, Kolkata (NCLT, Kolkata). On 28^th August, 2021 the appellant recorded in the minutes of the arbitral tribunal that it would not proceed with their counter-claim of Rs.80,66,81,775/-. On 1^st August, 2022 the arbitral tribunal passed an award of Rs.60,33,95,000/-.

8. An application under Section 34 of the Arbitration and Conciliatio