The provisions of Section 18 of the Limitation Act are applicable to proceedings under the IBC | An acknowledgement in a Balance Sheet without a qualification can furnish a legitimate basis for determining as to whether the period of limitation would stand extended, so long as the acknowledgement was within a period of three years from the original date of default – State Bank of India Vs. Krishidhan Seeds Pvt. Ltd. – Supreme Court
Hon’ble Supreme Court held that an acknowledgement in a balance sheet without a qualification can be relied upon for the purpose of the proceedings under the IBC. Neither the NCLT nor the NCLAT had the benefit of adjudicating upon the factual controversy in the context of the decisions of this Court. The principles which emerge are that:
(i) The provisions of Section 18 of the Limitation Act are not alien to and are applicable to proceedings under the IBC; and
(ii) An acknowledgement in a balance sheet without a qualification can furnish a legitimate basis for determining as to whether the period of limitation would stand extended, so long as the acknowledgement was within a period of three years from the original date of default.
