Legal Intern at Vinod Kothari & Company
The three-judge bench of the Hon’ble Supreme Court vide its order dated 14th April, 2021, in Asset Reconstruction Limited v. Bishal Jaiswal & Anr (‘ARCIL v. Bishal’) has settled the dust around acknowledgment of liability in books of corporate debtor for the purpose of section 18 of the Limitation Act; corollary to the applicability of the section to the Insolvency and Bankruptcy Code, 2016 (‘Code’). This comes in tandem with another recent order of the Hon’ble SC in LaxmiPat Surana v. Union Bank of India & Anr, wherein too the Apex Court upheld that acknowledgement of debt in the balance sheet would render initiation of the limitation period afresh for the purpose of filing an application under the Code.
In what seems to be the final word of law, the, vide the instant order, the Hon’ble SC further set aside the judgment set aside the Full Bench judgment of the Hon’ble NCLAT in V.Padmakumar v. Stressed Assets Stabilisation Fund, (‘V. Padmakumar’), wherein the Appellate Tribunal dismissed the benefit of extension of limitation to the creditors by virtue of the debt’s presentation in the books of the corporate debtor.
In this article, author humbly analyses the order of the Apex Court in ARCIL v. Bishal in light of the catena of preceding judgements both in favour and against the ratio-decidendi in ARCIL v. Bishal.