Searching Case Laws & Precedent on Legal Query!
Scanned Judgements…!
Searching Case Laws & Precedent on Legal Query!
Scanned Judgements…!
Similarly, in ["Saravana Global Holdings Ltd. , (Formerly known as Saravana Foundations Ltd. ,) Chennai VS N. Jayamurugan - Madras"], the confirmation of balance letter signed by S. Rajasekar and dated 26.02.2015 acknowledged an amount, but the letter did not disclose the total outstanding, indicating acknowledgment was specific to a particular sum.
Main Points and Insights
In some cases, acknowledgment in balance sheets over multiple years has been held to extend limitation for the amounts specifically acknowledged therein (["State Bank of India VS Sourabh Garg - National Company Law Tribunal"], ["Mr. Pramod Bafna vs Caprihans India Limited - National Company Law Tribunal"]).
Analysis and Conclusion
References:["Saravana Global Holdings Ltd. , (Formerly known as Saravana Foundations Ltd. ,) Chennai VS N. Jayamurugan - Madras"], ["SHRUSHTI CONTECH PRIVATE LIMITED VS VA TECH WABAG LIMITED - National Company Law Tribunal"], ["State Bank of India VS Sourabh Garg - National Company Law Tribunal"], ["Mr. Pramod Bafna vs Caprihans India Limited - National Company Law Tribunal"], ["UCO Bank vs Nicco Uco Alliance Credit Limited - National Company Law Tribunal"], ["M/s Zabraku Interactive Services Private Limited vs The Registrar of Companies, Uttar Pradesh - 2025 Supreme(Online)(NCLT) 1914"]
In the world of debt recovery, timing is everything. Creditors often rely on documents like balance confirmations to keep their claims alive against the ticking clock of limitation periods. But here's the burning question: Does a balance confirmation issued for a particular amount extend the limitation only for that amount, or for the entire outstanding debt against the debtor?
This issue frequently arises in commercial disputes under Indian law, where a simple signed statement can make or break a recovery suit. Drawing from Section 18 of the Limitation Act, 1963, and key judicial precedents, this post breaks down the legal nuances, supported by case insights. Note: This is general information; consult a legal professional for advice tailored to your situation.
A balance confirmation is typically a debtor's written statement verifying the outstanding amount owed to a creditor. It's common in audits, reconciliations, or ongoing business relationships. However, its power lies in whether it qualifies as an acknowledgment of liability under Section 18(1) of the Limitation Act, 1963.
Section 18(1) states: Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.
Key requirements:- Must be in writing and signed by the debtor.- Relate to a present subsisting liability.- Made before the original limitation expires.
The Supreme Court in Shapoorji Pallonji & Co. Ltd. v. Union of India (AIR 1962 SC 1624) stressed that acknowledgment must pertain to a current liability. Similarly, in Sampuran Singh v. Naranjan Singh (AIR 1999 SC 1047), it was clarified that a mere balance statement without explicit liability acknowledgment may not suffice. Punjab National Bank VS Lakhmi Chand Sunder Dass - 2000 0 Supreme(P&H) 816
Generally, a balance confirmation extends the limitation period only for the amount specifically acknowledged, not the entire outstanding debt. Courts scrutinize the document's wording:
For instance, in Tata Iron & Steel Company Limited, Rep. By its Power of Attorney Holder VS Omega Cables Limited - 2009 Supreme(Mad) 1474, the court noted: most of the claims as could be seen from the balance confirmation statement relate to the years 1998 and 1999 and those claims are barred by limitation. Therefore, the actual quantum of outstanding has not been proved. This highlights that old, unconfirmed portions remain time-barred. Tata Iron & Steel Company Limited, Rep. By its Power of Attorney Holder VS Omega Cables Limited - 2009 Supreme(Mad) 1474
In contrast, Megha Enterprises VS Haldiram Snacks Pvt. Ltd. - 2021 Supreme(Del) 2425 involved an email stating: Please refer your balance confirmation letters... Please find enclosed, which the court deemed an acknowledgment of Rs.19,03,77,000/-, extending limitation for that exact figure under Section 18. The court upheld an arbitral award, rejecting limitation pleas. Megha Enterprises VS Haldiram Snacks Pvt. Ltd. - 2021 Supreme(Del) 2425MEGHA ENTERPRISES AND ORS Vs HALDIRAM SNACKS PVT. LTD. - 2021 Supreme(Online)(DEL) 1716
Another example from BSEL Algo Limited VS Pankaj Bhattad - 2026 Supreme(Online)(NCLT) 96: A balance confirmation dated post-2018 was argued to extend limitation beyond 06.06.2018, with clarification that the balance limitation available as on 15.03.2020 would recommence from 01.03.2022. This shows targeted extension for confirmed balances. BSEL Algo Limited VS Pankaj Bhattad - 2026 Supreme(Online)(NCLT) 96
Timing is pivotal. Acknowledgments post-limitation expiry generally don't revive debts. As per ARHAM ENGINIRS PRIVATE LIMITED VS CEPHAM ORGANICS LIMITED - 1993 0 Supreme(Del) 510, it must precede expiration. ARHAM ENGINIRS PRIVATE LIMITED VS CEPHAM ORGANICS LIMITED - 1993 0 Supreme(Del) 510
In Manjiro Works VS Galaxy Entertainment Corporation Limited - 2016 0 Supreme(Bom) 868, extension was allowed if signed within the period, even for originally barred debts. Manjiro Works VS Galaxy Entertainment Corporation Limited - 2016 0 Supreme(Bom) 868
Subsequent actions reinforce this:- Payments: In Punjab National Bank VS Lakhmi Chand Sunder Dass - 2000 0 Supreme(P&H) 816, payments post-confirmation led to reversal of dismissal, extending limitation further. Punjab National Bank VS Lakhmi Chand Sunder Dass - 2000 0 Supreme(P&H) 816- Balance sheets: Acknowledgments in company balance sheets extend limitation, as noted in Fresh Coconut Products Ltd. VS Kerala State Industrial Development Corporation Ltd. - 2016 Supreme(Ker) 822: acknowledgement of liability in the balance sheet extends the period of limitation. Fresh Coconut Products Ltd. VS Kerala State Industrial Development Corporation Ltd. - 2016 Supreme(Ker) 822
Consider these scenarios:
| Scenario | Legal Effect | Reference ||----------|--------------|-----------|| Confirmation of specific Rs. 10 lakh balance | Extends limitation for Rs. 10 lakh only | Punjab National Bank VS Lakhmi Chand Sunder Dass - 2000 0 Supreme(P&H) 816 || Email acknowledging exact outstanding | Revives full confirmed amount | Megha Enterprises VS Haldiram Snacks Pvt. Ltd. - 2021 Supreme(Del) 2425 || Old claims in confirmation (1998-99) | Barred; only proved quantum viable | Tata Iron & Steel Company Limited, Rep. By its Power of Attorney Holder VS Omega Cables Limited - 2009 Supreme(Mad) 1474 || Post-expiry confirmation | No extension unless other factors | ARHAM ENGINIRS PRIVATE LIMITED VS CEPHAM ORGANICS LIMITED - 1993 0 Supreme(Del) 510 || Balance sheet admission | Extends for acknowledged debt | Fresh Coconut Products Ltd. VS Kerala State Industrial Development Corporation Ltd. - 2016 Supreme(Ker) 822 |
In winding-up contexts, like TATA IRON vs M/S OMEGA CABLES, disputed balances beyond confirmed statements weaken claims. TATA IRON vs M/S OMEGA CABLES
Electronics or emails count as valid acknowledgments if signed digitally, per evolving jurisprudence. Megha Enterprises VS Haldiram Snacks Pvt. Ltd. - 2021 Supreme(Del) 2425
Even weak confirmations gain strength from:- Part payments: Reset the clock under Section 19.- Conduct: Promises to pay or disputes implying liability.
In S. V. Developers VS State Bank of India, Hoskote SME Rep. By its Branch Manager, Bangalore - 2022 Supreme(Telangana) 365, modification applied only for the balance amount of the debt remaining outstanding. S. V. Developers VS State Bank of India, Hoskote SME Rep. By its Branch Manager, Bangalore - 2022 Supreme(Telangana) 365
Cheque issuances for balances, as in Prafulla Kumar Mohanty VS Akshya Kumar Biswal and PRAFULLA KUMAR MOHANTY VS AKSHYA KUMAR BISWAL - 2009 Supreme(Ori) 763, can imply acknowledgment if dishonored under NI Act. Prafulla Kumar Mohanty VS Akshya Kumar BiswalPRAFULLA KUMAR MOHANTY VS AKSHYA KUMAR BISWAL - 2009 Supreme(Ori) 763
In summary, a balance confirmation typically extends limitation for the particular amount confirmed, not the entire debt, provided it meets Section 18 criteria. Cases like Punjab National Bank VS Lakhmi Chand Sunder Dass - 2000 0 Supreme(P&H) 816ARHAM ENGINIRS PRIVATE LIMITED VS CEPHAM ORGANICS LIMITED - 1993 0 Supreme(Del) 510Manjiro Works VS Galaxy Entertainment Corporation Limited - 2016 0 Supreme(Bom) 868 affirm this targeted revival. Guru Nanak Rice Mills, Arnia VS Punjab National Bank Ltd. - 2000 0 Supreme(J&K) 185
Disclaimer: This post provides general insights based on precedents. Limitation issues are fact-specific; always seek expert legal counsel.
by the petitioner to the respondent to provide confirmation of balance in the respondent''s books of account; b) Confirmation of balance letter dated 26.02.2015 (Ex.C7) issued by the respondent to the petitioner, the receipt of which is acknowledged by an employee ... by the petitioner / respondent to the respondent / claimant to provide confirmation of balance in the claimant''s books; h) Confirmation of #HL_START....
It is stated that the Corporate Debtor has not disputed the claim of the Operational Creditor during the confirmation of balance. The Corporate Debtor has not disputed the acknowledgement of debt dated 04.04.2022, the limitation period extends by virtue of Section 18 of the Limitation Act. ... It is stated that the Operational Creditor had in response to the same , sent the confirmation of balance as on 04.04.2022 and the same has not been disputed b....
Since the Notice u/s 13(2) of the SARFAESI was issued on 4.03.2014 the limitation for initiation of proceedings extends till 4.3.2017 in accordance with section 18 of Limitation Act. 18. ... Accordingly, in the view of Bishal Jaiswal Judgement (Supra), the acknowledgment of debt reflected in the Balance Sheet for the F.Y. 2016-17 does amount to a valid acknowledgement of debt by the principal borrower. ... Thereby extends the #HL_S....
Further, most of the claims as could be seen from the balance confirmation statement relate to the years 1998 and 1999 and those claims are barred by limitation. Therefore, the actual quantum of outstanding has not been proved. ... A statutory notice dated 30.3.2002 was issued in the name of Tata SSL Limited for payment of the outstanding amount. ... outstanding amount due. ... Firstly, that the balance c....
The claim of the applicant was rejected by the Respondent Resolution Professional vide email dated 21.05.2025 on ground of limitation in terms of Article 137 of the Limitation Act stating that the period of limitation cannot be extended beyond 06.06.2018 by way of the said balance confirmation dated ... Further, it was clarified that the balance limitation available as on 15.03.2020 would recommence from 01.03.2022, thereby extending the limitation p....
outstanding amount. ... But, inasmuch as the amount claimed in the balance confirmation statement exceeds Rs.1 lakh and the claim in respect of statement, the appellant company had claimed the balance due to them p style="position:absolute
The petitioner had been calling upon the company to clear the entire outstanding amount and ultimately served the statutory notice under Section 434 of the Companies Act calling upon the company to pay the principal amount plus interest at the rate of 18% p. a. ... This outstanding due is payable by the company. The company infact confirmed the credit balance. The company also issued Form c in respect of the material supplied by the petitioner. ... Chaudhary, appear....
The entire evidence when read in proper perspective, it makes it amply clear that the aforesaid email dated 04.06.2013 was sent by and on behalf of the Respondent admitting and acknowledging the balance confirmation of Rs.19,03,77,000/-, the amount which is specifically mentioned in the letter dated ... Please refer your balance confirmation letters and email from Shri Mohit dua asking us our balance confirmation letters, Please find enclosed #HL_ST....
The entire evidence when read in proper perspective, it makes it amply clear that the aforesaid email dated 04.06.2013 was sent by and on behalf of the Respondent admitting and acknowledging the balance confirmation of Rs.19,03,77,000/-, the amount which is specifically mentioned in the letter dated ... Please refer your balance confirmation letters and email from Shri Mohit dua asking us our balance confirmation letters, Please find enclosed #HL_ST....
Raghu Mehta, learned counsel for the appellants are two fold (i) that the claim is barred by limitation because the acknowledgment of debt by executing the balance confirmation letters after the debt had become barred by time does not save the limitation and (ii) that the interest could not be charged ... The appellants did not specifically deny the execution of their balance confirmation. They simply denied the averments. Moreover, the respondents N....
Act would accordingly be modified to operate only for the balance amount of the debt remaining outstanding.
In other words, acknowledgement of liability in the balance sheet extends the period of limitation. Therefore, a time barred debt cannot be the basis of a winding up petition. However, admission of a debt in the balance sheet of the company would amount to acknowledgement, extending the period of limitation.
Therefore, the complainant withdrew said complaint. Thereafter, the accused issued another cheque bearing No. 287935 for balance amount of Rs.1,15,000 outstanding against him. The complainant presented the cheque in the bank for payment to his account.
Thereafter, the accused issued Anr. cheque bearing Nos. 287935 for balance amount of Rs. 1,15,000/- outstanding against him. Therefore, the complainant withdrew said complaint. The complainant presented the cheque in the Bank for payment to his account.
The plaintiff also issued a notice to the 2nd defendant as guarantor to pay to the plaintiff a sum of Rs. 29,096 being eight monthly instalments then overdue. 9. 1977 seeking payment of the entire balance amount then due and outstanding. According to the plaintiffs, as on the date of the notice an outstanding which is payable with interest for delay in payment was a sum of Rs. 29,096/-
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
