IL & FS Financial Services Ltd. vs Adhunik Meghalaya Steels Pvt. Ltd. 2025 INSC 911 - IBC- S.18 Limitation Act - Balance Sheet
Insolvency and Bankruptcy Code 2016 - Section 238A - Limitation Act 1961- Section 18- Entries in Balance Sheets could constitute a valid acknowledgement - Referred to Asset Reconstruction Co. (India) Ltd. v. Bishal Jaiswal and Another, (2021) 6 SCC 366. (Para 22) As to whether a certain document in a given case constitutes a valid acknowledgement would depend on the facts and circumstances of each case.(Para 38) [Context: In this case, the Court found that Balance Sheet of F.Y. 2019- 20, viewed in the background of the other admitted documents, including the financial statements of the previous years, clearly constitutes a valid acknowledgment of a subsisting liability and indicated the existence of a jural relationship and an admission as to the existence of such relationship. (Para 41)]
Limitation Act 1961- Section 18- An acknowledgment of debt merely renews the debt and does not create a new right of 19 action. It is further essential that the acknowledgment must relate to a subsisting liability and must indicate the jural relationship between the parties such as that of debtor and creditor, and it must appear that the statement is made with the intention to admit such jural relationship- Such intention can be inferred by implication from the nature of the admission and need not be expressed in words- In construing the words used in the statements, surrounding circumstances can always be considered and that Courts lean in favour of a liberal construction of such statements, though intention cannot be fastened by an involved or far-fetched process of reasoning- Referred to Khan Bahadur Shapoor Fredoom Mazda v. Durga Prasad Chamaria and Others, 1961 SCC OnLine SC 147 (Para 26-28)
Case Info
Case Name and Neutral Citation
- Case Name: IL & FS Financial Services Limited v. Adhunik Meghalaya Steels Private Limited
- Neutral Citation: 2025 INSC 911
Coram (Judges)
- Justice Manoj Misra
- Justice K.V. Viswanathan
Judgment Date
- 29th July, 2025
Caselaws and Citations Referred
- Dena Bank (Now Bank of Baroda) v. C. Shivakumar Reddy and Anr.
- (2021) 10 SCC 330
- Gaurav Hargovindbhai Dave v. Asset Reconstruction Co. (India) Ltd. and Anr.
- (2019) 10 SCC 572
- B.K. Educational Services (P) Ltd. v. Parag Gupta & Associates
- (2019) 11 SCC 633
- Jignesh Shah and Anr. v. Union of India and Anr.
- (2019) 10 SCC 750
- Khan Bahadur Shapoor Fredoom Mazda v. Durga Prasad Chamaria and Others
- 1961 SCC OnLine SC 147
- Lakshmirattan Cotton Mills Co. Ltd. and M/s Behari Lal Ram Charan v. Aluminium Corporation of India Ltd.
- (1971) 1 SCC 67
- Asset Reconstruction Co. (India) Ltd. v. Bishal Jaiswal and Another
- (2021) 6 SCC 366
- Vidyasagar Prasad v. UCO Bank and Anr.
- 2024 SCC OnLine SC 2993
- Laxmi Pat Surana v. Union Bank of India
- (2021) 8 SCC 481
- Rajendra Narottamdas Sheth and Anr. v. Chandra Prakash Jain and Anr.
- (2022) 5 SCC 600
- OPG Power Generation Private Ltd. v. Enexio Power Cooling Solutions (India) Private Ltd. And Anr.
- (2025) 2 SCC 417
- Bengal Silk Mills Co. v. Ismail Golam Hossain Ariff
- 1961 SCC OnLine Cal 128 : AIR 1962 Cal 115
Statutes/Laws Referred
- Insolvency and Bankruptcy Code, 2016 (IBC)
- Limitation Act, 1963 (especially Section 18 and Article 137)
- Indian Accounting Standards (Ind AS) 7
- Companies Act (regarding balance sheets and financial statements)
- Supreme Court Orders in Suo Moto Writ Petition (C) No. 3 of 2020 (regarding extension of limitation during COVID-19)
- Indian Evidence Act, 1872
#SupremeCourt reiterates that Entries in Balance Sheets could constitute a valid acknowledgement of debt under Section 18 Limitation Act. As to whether a certain document in a given case constitutes a valid acknowledgement would depend on the facts and circumstances of each case,… https://t.co/nwtCxwBFgD pic.twitter.com/LjHE7tdZw4
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