• Legal Era India
  • Legal Era Global
  • Membership
  • Sign inSUBSCRIBE
Legal Era
X
Sign in
  • Home
  • News
    +
    • From the Courts
    • Policy & Law
    • Supreme Court (India)
    • High Court (India)
    • TAX Updates
    • MARKET WATCH
    • Deal Street
    • Global Insights
    • IBC Cases
    • Hires & Moves
    • IP News
    • Competition Verdict
    • Global Articles
    • Global Deals
  • Articles
    +
    • ABOUT THE LAW
    • AWARDS & ACCOLADES
    • Aerospace
    • Agriculture
    • Alternate Dispute Resolution
    • Banking and Finance
    • Bankruptcy
    • Book Review
    • Bribery & Corruption
    • Commercial Litigation
    • Competition Law
    • Conference Reports
    • Consumer Products
    • Contract
    • Corporate Governance
    • Corporate Law
    • Covid-19
    • Cryptocurrency
    • Cybersecurity
    • Data Protection
    • Defence
    • Digital Economy
    • E-commerce
    • Employment Law
    • Energy and Natural Resources
    • Entertainment and Sports Law
    • Environmental Law
    • FDI
    • Food and Beverage
    • Health Care
    • IBC Diaries
    • Insurance Law
    • Intellectual Property
    • International Law
    • Labour Laws
    • Litigation
    • Litigation Funding
    • Manufacturing
    • Mergers & Acquisitions
    • NFTs
    • Privacy
    • Private Equity
    • Project Finance
    • Real Estate
    • Risk and Compliance
    • Technology Media and Telecom
    • Tributes
    • Zoom In
    • Take On Board
    • In Focus
    • Law & Policy and Regulation
    • IP & Tech Era
    • Viewpoint
    • Arbitration & Mediation
    • Tax
    • Student Corner
    • ESG
    • Gaming
    • Inclusion & Diversity
  • Law Firms
    +
    • Global Law Firm
    • Asia Law Firm
    • India Law Firm
  • In-House
  • Rankings
  • E-Magazine
  • Legal Era TV
  • Legal Era TV
  • Events
  • News
    • From the Courts
    • Policy & Law
    • Supreme Court (India)
    • High Court (India)
    • TAX Updates
    • MARKET WATCH
    • Deal Street
    • Global Insights
    • IBC Cases
    • Hires & Moves
    • IP News
    • Competition Verdict
    • Global Articles
    • Global Deals
  • Articles
    • ABOUT THE LAW
    • AWARDS & ACCOLADES
    • Aerospace
    • Agriculture
    • Alternate Dispute Resolution
    • Banking and Finance
    • Bankruptcy
    • Book Review
    • Bribery & Corruption
    • Commercial Litigation
    • Competition Law
    • Conference Reports
    • Consumer Products
    • Contract
    • Corporate Governance
    • Corporate Law
    • Covid-19
    • Cryptocurrency
    • Cybersecurity
    • Data Protection
    • Defence
    • Digital Economy
    • E-commerce
    • Employment Law
    • Energy and Natural Resources
    • Entertainment and Sports Law
    • Environmental Law
    • FDI
    • Food and Beverage
    • Health Care
    • IBC Diaries
    • Insurance Law
    • Intellectual Property
    • International Law
    • Labour Laws
    • Litigation
    • Litigation Funding
    • Manufacturing
    • Mergers & Acquisitions
    • NFTs
    • Privacy
    • Private Equity
    • Project Finance
    • Real Estate
    • Risk and Compliance
    • Technology Media and Telecom
    • Tributes
    • Zoom In
    • Take On Board
    • In Focus
    • Law & Policy and Regulation
    • IP & Tech Era
    • Viewpoint
    • Arbitration & Mediation
    • Tax
    • Student Corner
    • ESG
    • Gaming
    • Inclusion & Diversity
  • Law Firms
    • Global Law Firm
    • Asia Law Firm
    • India Law Firm
  • In-House
  • Rankings
  • E-Magazine
  • Legal Era TV
  • Legal Era TV
  • Events
search-icon

Top Stories

HomeNewsFrom the Courts
15 April 2021 12:30 PM GMT

Interplay Between IBC & Limitation Act: Supreme Court Holds Balance Sheets can amount To Acknowledgment of Liabilities u/s 18 Limitation Act

By Legal Era
Interplay Between IBC & Limitation Act: Supreme Court Holds Balance Sheets can amount To Acknowledgment of Liabilities u/s 18 Limitation Act

Interplay Between IBC & Limitation Act: Supreme Court Holds Balance Sheets can amount To Acknowledgment of Liabilities u/s 18 Limitation Act The Supreme Court (SC) in the case titled India Limited v. Bishal Jaiswal ruled that balance sheets can amount to an acknowledgment of debt under Section 18 of the Limitation Act. The SC bench comprising of Justices Rohinton Nariman, BR Gavai,...

ToRead the Full Story, Subscribe to Legal Era

Access the exclusive LEGAL ERAStories,Editorial and Expert Opinion

Subscribe Now
AlreadyaSubscriber?SigninNow
View Plans

Interplay Between IBC & Limitation Act: Supreme Court Holds Balance Sheets can amount To Acknowledgment of Liabilities u/s 18 Limitation Act

The Supreme Court (SC) in the case titled India Limited v. Bishal Jaiswal ruled that balance sheets can amount to an acknowledgment of debt under Section 18 of the Limitation Act.

The SC bench comprising of Justices Rohinton Nariman, BR Gavai, and Hrishikesh Roy, delivered a judgment against the decision of a five-member bench of the National Company Law Appellate Tribunal (NCLAT) which had refused to analyze the correctness of the judgment passed in the case titled V Padmakumar v. Stressed Assets Stabilization Fund.

The three members of the NCLAT reference bench had approached the Top Court to examine the remarks made against them by the five-member Bench of the Tribunal in its judgment. On 19 February 2021, the Apex Court allowed the plea of the reference bench.

Issue

Whether a reflection of debt in the Balance Sheet of a Corporate Debtor would amount to an acknowledgment under Section 18 of Limitation Act?

The NCLAT with a 4:1 majority held that reflection of debt in the balance sheet could not be considered as an acknowledgment of debt under Section 18 of the Limitation Act. It concluded that the filing of a balance sheet being mandatory under Section 92(4) of the Companies Act, 2013, cannot be treated to be an acknowledgment.

A three-member bench in September 2020, doubted the correctness of the decision in V Padmakumar in another case and referred the matter to a five-member Bench to re-examine the correctness of V Padmakumar.

It stated that the SC and various High Courts have consistently held that an entry made in the Company's Balance Sheet amounts to an acknowledgment of debt under Section 18 of the Limitation Act, 1963, in view of the settled law, V. Padmakumar's Case requires reconsideration.

The five-member bench while dismissing the reference made by the three-member bench termed the reference as inappropriate, incompetent and a misadventure.

It added that "The remedy available under the Insolvency & Bankruptcy Code (IBC) is a remedy distinct from remedy available in civil jurisdiction/ recovery mechanism and since the Code is not a complete Code, provisions of Limitation Act are attracted to proceedings under it before NCLT and NCLAT as far as applicable i.e. in regard to matters not specifically provided for in the Code."

The Appellate Tribunal stated that such misadventures weaken the authority of law, dignity of the institution as also shake people's faith in the rule of law and hoped that the members of the Referral Bench would exhibit a more serious attitude towards adherence to the binding judicial precedents and not venture to cross the red line.

Next Story
TAGS:
  • #IBC
  • #Limitation Act
  • #Balance Sheets
  • #Supreme Court
  • #Acknowledgment
  • #Debts
  • #Justice Rohinton Nariman
  • #Justice BR Gavai
  • #Justice Hrishikesh Roy
Similar Posts
Trending Now
Recommended Articles
  • News
  • From the Courts
  • Supreme Court (India)
  • High Court (India)
  • Global Insights
  • Deal Street
  • Hires & Moves
  • Refund & Cancellation Policy
  • Articles
  • Zoom In
  • Take On Board
  • In Focus
  • Law & Policy
  • IP & Tech Era
  • Viewpoint
  • Arbitration & Mediation
  • Tax
  • Student Corner
  • Interviews
  • Law Firms
  • E-Magazine
  • Legal Era TV
  • Membership
  • Reader's Feedback
  • Cartoons
  • Subscribe
  • Advertise
Follow Us
Subscribe Newsletter
  • 2023© All rights reserved Legal Era Media Group
  • Who We Are
  • Careers
  • Advertise with Us
  • Contact Us
  • Privacy Policy
  • Terms and Conditions
Powered by  Hocalwire
X