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ARTICLE · 15 OCTOBER 2020

Balance Sheet And Acknowledgment Of Liability In IBC – Debate Far From Settled

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A contentious issue in the interplay between the Insolvency and Bankruptcy Code, 2016 (IBC) and the Limitation Act, 1963 (Limitation Act) has been the applicability of Section 18...

IndiaFinance and Banking
Kumar Saurabh Singh
Kumar Saurabh Singh
Rahul Chakraborti
Rahul Chakraborti
Ashwij Ramaiah
Ashwij Ramaiah
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A contentious issue in the interplay between the Insolvency and Bankruptcy Code, 2016 (IBC) and the Limitation Act, 1963 (Limitation Act) has been the applicability of Section 18 of the Limitation Act (Section 18), which stipulates that a fresh period of limitation shall be computed from the time of the acknowledgement of liability in writing before the expiration of the prescribed period of limitation. In the context of IBC, the question is whether such an acknowledgement of debt in entries in a balance sheet would extend the limitation period for the purposes of filing an application for the initiation of corporate insolvency resolution process (CIRP) under Section 7 of the IBC (Section 7 Application).

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