The main legal point established in the judgment is the admissibility and weight of evidence under the Act, 1996, and the limited scope of interference under Sections 34 and 37 of the Act, 1996.

JUDGMENT :

NEENA BANSAL KRISHNA, J

1. The present Appeal under Section 37(1) (c) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “Act, 1996”) has been preferred against the Order dated 10.11.2020 of the learned District Judge, Commercial Courts-03, Patiala House Courts dismissing the Objections preferred under Section 34 of the Act, 1996 against the interim Award dated 13.08.2020 passed by the learned Arbitrator.

2. Facts in brief are that the appellant invited Tender bearing No. BHEL/NR/SCT/GVKGOINDWAL/BOILER/709 for erection, testing, commissioning and trail operation of boilers, including ESP, rotating machines and piping of 2X270 MW Units (Unit I & II) at GVK, Goindwal Thermal Power Station, District Tarantaran, Punjab. The Contract was awarded to the respondent for an amount of Rs. 380,000,000/- vide Letter of Intent bearing No. BHEL/NR/SCT/GVKGOINDWAL/BOILER/709 (718) dated 09.07.2010.

3. Certain disputes arose between the parties under the Contract and the respondent/claimant Company invoked arbitration in terms of Clause 33 of the General Instructions to Tenders and Contract dated 09.07.2010 and an Arbitrator was appointed.

4. The learned Arbitrator commenced the hearing on 05.11.2018 but thereafter, adjourned the proceedings sine die vide Order dated 12.02.2019 in view of the initiation of CIRP proceedings. The proceedings, however, were later resumed. The respondent filed its Statement of Claim for a sum of Rs. 22,24,10,826/- before the learned Arbitrator on 27.09.2019.

5. The appellant moved an Application under Section 14 of the Insolvency and Bankruptcy Code, 2016 on the ground that no pending proceedings can be continued once the petition against the Creditor Debtor/respondent was admitted by NCLT and requested that the arbitral proceedings be adjourned sine die till the continuation of Resolution Process by the adjudicating authority. The learned Sole Arbitrator on 12.02.2019 adjourned the proceedings sine die observing that the appellant herein being an Operational Creditor, may not be in a position to file its Counter-Claim before the Interim Resolution Professional (IRP) appointed by the Arbitral Tribunal, but there is no bar to the Corporate Debtor/respondent herein to continue with the proceedings before the Arbitrator.

6. In the meanwhile, the appellant/Operational Creditor appeared before the Interim Resolution Professional and submitted its claims in Form B under Section 7 of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 under various heads. The appellant in Colum No. 8 gave “details of any mutual credit, mutual debts, or other mutual dealings between the corporate person and the operational creditor which may be set-off against the claim”. The total amount claimed by the appellant was as under:

(i) The final amount for the executed work is Rs. 33,15,90,688/-.

(ii) The amount paid for the executed work is Rs. 32,77,45,131/-.

(iii) Net payable amount to the respondent is Rs. 38,45,557.88/-.

(iv) Balance payable amount under the head of PVC is Rs. 15,58,113.97/-.

(v) Balance payable amount under the head of ORC is Rs. 15,00,000/-.

7. The appellant thus admitted that a total sum of Rs. 69,03,671.85/- was liable to be adjusted as set off, from the total amount of Rs. 2,64,19,997.33/- payable to him by the respondent.

8. The respondent/Claimant, on the basis of the documents relied upon by the appellant along with the Statement of Defence before the Arbitrator, filed an Application under Section 31(6) read with Section 17 of the Act, 1996 dated 06.07.2020 for allowing an interim Award in terms of the admitted amount stated as set-off in Form B before the IRP.

9. The appellant herein contested the application and denied having admitted any liability and asserted that the pleadings in respect of set-off as mentioned in Form B before the IRP, were a defence given to it by the statute itself and unless and until the set-off is ad