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The Supreme Court has held that entries in balance sheets can amount to acknowledgement of debt for the purpose of extending limitation under Section 18 of the Limitation Act.
A bench headed by Justice RF Nariman set aside a judgment of Full Bench of National Company Law Appellate Tribunal in the case
V Padmakumar v Stressed Assets Stabilization Fund which held otherwise.
Issues
The issue raised before the Apex Court bench in appeal was whether an entry made in a balance sheet of a corporate debtor would amount to an acknowledgement of liability under Section 18 of the Limitation Act.? Yet another issue was whether Section 18 of the Limitation Act, which extends the period of limitation depending upon an acknowledgement of debt made in writing and signed by the corporate debtor, is also applicable under Section 238A, given the expression as far as may be governing the applicability of the Limitation Act to the IBC? (Second issue, the bench observed that it i