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TMI Blog2021 (12) TMI 1018X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment of ASSET RECONSTRUCTION COMPANY (INDIA) LIMITED VERSUS BISHAL JAISWAL ANR. [ 2021 (4) TMI 753 - SUPREME COURT] , the Hon ble Supreme Court again reiterated that Section 18 of the Limitation Act, 1963 is fully applicable to proceedings under I B Code and entries in books of accounts and/ or balance sheets of a Corporate Debtor would amount to an acknowledgment under Section 18 of the Limitation Act. The Adjudicating Authority having not examined the balance sheet for Financial Year 2016-17 ending on 31.03.2017. In the interest of justice, the Adjudicating Authority has to examine the balance sheet to find out as to whether it contain acknowledgment within the meaning of Section 18 of the Limitation Act or not. Second ground given by the Adjudicating Authority for rejecting the Application i.e. that there is no document to show that any interest has ever been paid to the Petitioner by the Corporate Debtor in lieu of the amount, hence, Appellant is not covered in the definition of Financial Creditor - HELD THAT:- The definition begins with the expression financial debt means a debt alongwith interest, if any. Thus a financial debt may be with interest, if any. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .03.2016 and the Application under Section 7 having been filed on 20.03.2020 i.e. beyond three years, Application is barred by time. Secondly, the Appellant/ Applicant does not come within the definition of Financial Creditor since there is no document to show any interest has ever been paid to the Applicant by the Corporate Debtor in lieu of the amount. Challenging the impugned judgment this Appeal has been filed. Notices were issued in the Appeal on 04.06.2021 although the Respondents were served but neither any one appeared for the Respondents nor filed any reply. At the time of hearing also, no one appeared for the Respondents. 2. Learned Counsel for the Appellant challenging the impugned judgment contends that the balance sheet for the Financial Year ending 31.03.2017, which was signed by the Corporate Debtor on 01.09.2017 contains an acknowledgment with regard to sum of ₹ 39 Lakh by the Corporate Debtor. Hence, the Application filed by the Appellant was not barred by time. Appellant was entitled for fresh period of limitation due to the above acknowledgment. Learned Adjudicating Authority committed error in not considering the said objection. It is further submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are a balance sheet but no compulsion to make any particular admission, is correct in law as it would depend on the facts of each case as to whether an entry made in a balance sheet qua any particular creditor is unequivocal or has been entered into with caveats, which then has to be examined on a case by case basis to establish whether an acknowledgement of liability has, in fact, been made, thereby extending limitation under Section 18 of the Limitation Act. xxx xxx xxx 40. In CIT-III v. Shri Vardhman Overseas Ltd., 2011 SCC OnLine Del 5599 : (2012) 343 ITR 408, the Delhi High Court held: 17. In the case before us, as rightly pointed out by the Tribunal, the assessee has not transferred the said amount from the creditors' account to its profit and loss account. The liability was shown in the balance sheet as on 31st March, 2002. The assessee being a limited company, this amounted to acknowledging the debts in favour of the creditors. Section 18 of the Limitation Act, 1963 provides for effect of acknowledgement in writing. It says where before the expiration of the prescribed period for a suit in respect of any property or right, an acknowledgement of liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee company in its balance sheet as on 31st March, 2002 of the accounts of the sundry creditors amounts to an acknowledgement of the debts in their favour for the purposes of Section 18 of the Limitation Act. The assessee s liability to the creditors, thus, subsisted and did not cease nor was it remitted by the creditors. The liability was enforceable in a court of law. 6. In another recent judgment of the Hon ble Supreme Court in Dena Bank vs. C. Shivakumar Reddy and Ors.- Civil Appeal No. 1650 of 2020 , after referring to the judgment of Asset Reconstruction Company (India) Limited (supra), the Hon ble Supreme Court again reiterated that Section 18 of the Limitation Act, 1963 is fully applicable to proceedings under I B Code and entries in books of accounts and/ or balance sheets of a Corporate Debtor would amount to an acknowledgment under Section 18 of the Limitation Act. In paragraph 118, following has been laid down:- 118. It is well settled that entries in books of accounts and/or balance sheets of a Corporate Debtor would amount to an acknowledgment under Section 18 of the Limitation Act. In Asset Reconstruction Company (India) Limited v. Bishal Jaiswall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any, which is disbursed against the consideration for the time value of money and includes (a) money borrowed against the payment of interest; (b) any amount raised by acceptance under any acceptance credit facility or its de-materialised equivalent; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; (d) the amount of any liability in respect of any lease or hire purchase contract which is deemed as a finance or capital lease under the Indian Accounting Standards or such other accounting standards as may be prescribed; (e) receivables sold or discounted other than any receivables sold on non-recourse basis; (f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing; [Explanation. -For the purposes of this sub-clause, - (i) any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing; and (ii) the expressions, allottee and real estate project shall have the meanings respectively assi ..... 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