The National Company Law Appellate Tribunal (NCLAT), New Delhi bench comprising Justice Rakesh Kumar, Judicial Member and Dr. Ashok Kumar Mishra, Technical Member was hearing an Appeal on the issue of limitation and held that a duly audited Balance Sheet will act as an acknowledgement of debt under Section 18 of the Limitation Act, 1963.
The NCLAT New Delhi bench noted, "keeping in mind the provisions of the Insolvency and Bankruptcy Code, 2016 and law laid down on the subject, it was not in dispute that the dues of the Corporate Debtor were falling within the provisions of Section 18 of the Limitation Act and since debt and default were not in dispute & dues were payable in fact and law and was in accordance with the provisions of the Code, so Section 7 of the Code is attracted.
The NCLAT bench observed, that the Apex Court had already settled the law that Balance Sheet dues so reflected appropriately in the Balance Sheet and that too a duly audited Balance Sheet will act as an acknowledgement of debt under Section 18 of the Limitation Act, 1963 & hence the initiation of CIRP was permissible under Section 7 of the “Code”.
Hence, the Appellate Authority at the NCLAT New Delhi were unable to sustain the views of Adjudicating Authority (NCLT) which was not in consonance with the provisions of the Code. The Appeal was accordingly allowed and the impugned order was set aside.