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Showing contexts for: acknowledgment balance sheet in B. Prashanth Hegde vs State Bank Of India on 12 February, 2026Matching Fragments
34. The judgments of Hon’ble Supreme Court in Swiss Ribbons (P) Ltd. (supra), Innoventive Industries Ltd. (supra) and B.K. Educational Services (P) Ltd. (supra) do not explicitly cover the issue of acknowledgement of debt through documents such as balance sheet. In the matter of ARCIL vs. Bishal Jaiswal (supra), the Hon’ble Supreme Court has held that fresh limitation will start from the date of acknowledgement in the balance sheet of the CD. This judgment of Supreme Court now holds the fort insofar as calculation of limitation period is concerned taking into account the acknowledgements by CD in certain documents like the balance sheets and in other documents. In the case of Reliance Asset Reconstruction Co. Ltd. vs. Hotel Poonja International Pvt. Ltd., the balance sheets were not relied upon because no evidence had been put forward to show that they were signed before the expiry of the prescribed period of limitation and there was no pleading to the said effect in the application under Section 7 of IBC. As opposed to this situation, in the present case the balance sheets relate to the period within three years from the date of NPA of the four banks, which are 28.5.2014 for SBI, 30. 6.2014 for PNB 10.10.2014 for Corporation Bank and 31.12.2014 for UCO Bank and hence the acknowledgements which were implicit in these balance sheets are within three years of the date of start of limitation, and therefore extend limitation as per section 18 of the Limitation Act.
35. In the case of Indian Overseas Bank vs. Patel Woods Products Limited 2020 SCC OnLine NCLAT 551, the Securitization Application filed by Indian Overseas Bank had been disposed of. Since Section 7 application which was filed thereafter, took the date of default as barred by limitation and expressly for recovery of amount. Hence, the Section 7 application was not admitted. In contrast, in the present appeal, there is no decree for execution and the Section 7 application is also considered to be within limitation, due to various acknowledgements in balance sheets for the financial years 2013-14 and 2014-15 and reply filed before DRT, which provide fresh lease of life to the issue of limitation.
20. It was also submitted that in absence of the date of default in the application under Section 7, an assessment as to whether the limitation period got extended by acknowledgment was not possible. Besides, a balance-sheet can be considered as an acknowledgment only when it is duly approved by the shareholders in an appropriate meeting, as was held by the Calcutta High Court in Pandam Tea Company Ltd.22 Whereas the balance-sheet relied by NCLAT was not authenticated, and one which was never approved in the shareholder meeting. Besides, the last balance- sheet filed by CD with ROC was in the year 2013, and the same balance-sheet made no acknowledgement of liability as it was qualified by stating:
ISSUE (II)
46. On the issue as to whether the Section 7 application was within limitation, the application was presented on 25.04.2018 i.e., within three years from 30.09.2015 i.e., the date on which CD’s balance sheets for the year ending 31.03.2014 and 31.03.2015 were signed. An acknowledgment of debt in the balance sheet of the CD is considered sufficient to extend the period of limitation if other conditions of a valid acknowledgment are fulfilled41. To wriggle out from the consequences of the aforesaid acknowledgement, the appellant has raised a plea that the balance sheets were not submitted for approval of the members of CD and were not authenticated by the person authorized. What transpires from the record is that the balance sheets were signed by one of the directors of CD and were brought on record by CD itself in S.A. No.152 of 2016 for challenging the measures taken by the Banks under the SARFAESI Act42.