The SC in Bharti Airtel Ltd. v. Vijaykumar V. Iyer, ^[1] held that creditors are not entitled to claim set-off during the course of Corporate Insolvency Resolution Process (‘CIRP’) under the Insolvency and Bankruptcy Code, 2016. The SC held that the provisions of statutory set-off (in terms of Order VIII Rule 6 of Civil Procedure Code, 1908) or insolvency set-off as permitted by the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 cannot be applied to the CIRP. However, the SC clarified that the above rule would be subject to two exceptions: (i) a contractual set off may be permitted in case a party is entitled to the same, before the date which is effective before or on the date on which the CIRP commences; and (ii) an equitable set off may be permitted when the claim and counter claim in the form of set-off are linked and connected on account of one or more transactions that can be treated as one.

[1] Bharti Airtel Ltd. v. Vijaykumar V. Iyer & Ors. (2024) SCC OnLine SC 4.