Insolvency and Bankruptcy Code, 2016 – s.238A – s.18 of Limitation Act – No specific and clear acknowledge of debt in the balance sheet entries necessary while computing limitation u/s.18 Limitation Act r/w s.238A of the IBC: Held: It was contended by the Appellant that there is no unequivocal, unambiguous and specific acknowledgement of debt owed to Respondent – Financial Creditor in the balance sheet entries of Corporate Debtor for the years 2017 and 2019 – The CIRP was admitted by the NCLT on the ground that there is acknowledgement of debt in the balance sheet entries as well as Auditors Report for the year ending 31.01.2017 – The order of admission of CIRP affirmed by the NCLAT – The Appellant contended that the name of Financial Creditor in question is not specifically mentioned in the relied upon entry in the balance sheet – It was contended that in the absence of clear demarcation as to what the Corporate Debtor owes to the Financial Creditor in question, the balance sheet entries cannot be relied on for the purpose of extending the period of limitation in terms of Section
18 of the Limitation Act – By relying on Asset Reconstruction Company (India) Ltd. v. Bishal Jaiswal [2021] 3 SCR 524, the Civil Appeal filed by the Appellant was dismissed – The contention of the Financial Creditor that there was no compulsion for Companies to make any particular admissions in the balance sheet was accepted by the Court – The entry made in the balance sheet coupled with the note of the auditor of the Appellant clearly amounts to acknowledgement of the liability – The Court noted that the Corporate Debtor’s proposal of One Time Settlement (OTS) also fortifies the case against the Appellant – The Civil Appeal dismissed accordingly. [Paras 8-13]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Mukund P Unny, Hony. Associate Editor (Verified by: Liz Mathew, Sr. Adv.). Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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