A statement in a balance sheet indicating liability along with a directors' report stating that the liabilities are barred by limitation does not amount to an acknowledgment of liability under Section 18 of the Limitation Act, 1963.

( 1 ) THIS is a petition for winding up of the company. The company in question is Pandam Tea Company Limited. The petitioner Raghunath and Sons Private Ltd. claims to be a creditor of the said Company in respect of moneys lent and advanced during the 14th July, 1958 and 19th December, 1967. As a result of these transactions and repayments according to the petitioner, a sum of Rs. 1,58,875. 25 remained unpaid upto 30th June, 1967. Thereafter interest had accrued due to the petitioner and the petitioner has filed this petition for a claim of Rs. 2,67,492. 72. According to the petitioner, the said liability or debt of the petitioner had been acknowledged by the Company in the balance-sheets of the company year after year from 1958 to 1968. The petitioner further states that statutory notice had been given on the 4th September, 1971 which, according to the petitioner, remains unreplied. Before admitting this petition for winding up notice was directed to be given to the Company and the Company appeared and in its affidavit in opposition has asked for stay of the issuance of advertisement and further proceedings.

( 2 ) THE Question at this stage, therefore, is whether I should admit this winding up petition. In order to determine that question it is necessary to find out whether the defence raised or pleaded by the Company in its affidavit in opposition is bona fide and reasonable. In the affidavit-in-opposition filed by the Company several contentions challenging the genuineness of the transactions have been raised. I was told that in respect of another winding up petition in C. F. No. 225 or 1970 (Cal.) (Pandam Tea Co. Ltd. v. Darjeeling Commercial Co. Ltd.) similar contentions had been raised and these had been rejected by Ghose. J. by his order dated 2nd/3rd May, 1971. I am further informed that there was an appeal from the order and judgment of Ghose, J. and unconditional stay has been granted in respect of the said winding up proceedings. Be that as it may, though in this application more or less similar factual contentions had been raised by the Company in its affidavit the said contentions were not pressed before me by counsel appearing on behalf of the company. The only point that was urged before me in this application on behalf of the Company was that the claim of the petitioning creditor was barred by limitation. It was urged that this application had been presented on the 9th March, 1972, The petitioner had relied on the alleged acknowledgment made in the balance-sheet for the year 1968 which was signed on 20th July, 1970. The previous balance-sheet for the year 1967 had been signed on 3rd June, 1968. The balance-sheet which was signed by the Directors on the 20th July, 1970 contained an acknowledgment as required under Section 18 of the Limitation Act. 1963, which is in similar terms with Section 19 of the Indian Limitation Act, 1908. Therefore, it is necessary to determine whether the statement contained in the balance-sheet for the year 1968 signed on the 20th July, 1970 amounts to an acknowledgment of liability under Section 18 of the present Limitation Act. In the case of Bengal Silk Mills Co. v. Ismail Golam Hossain Ariff. , there was a balance-sheet which showed the amount claimed in that suit as "debt owing by the company to the plaintiff" under tine liabilities of the Company and it was relied upon by the plaintiff in that suit as as acknowledgment. It was contended that it was not a sufficient acknowledgment within Section 19 of the Limitation Act of 1908 because it had been prepared under compulsion of statute and of the Articles of Association of the Company and it did not contain admissions of liability existing on the date on which admission was made and it was not signed by the person duly authorised on behalf of the Company to make an acknowledgment of liability to the plaintiff. It was held by the Division Bench that though there was a compulsion upon the managing agents to p