
Summary: The Supreme Court has held that entries in a corporate debtor’s balance sheet, when read alongside corroborative materials including cash flow statements, constitute a valid acknowledgement of debt under Section 18 of the Limitation Act, 1963, thereby resetting the period of limitation for creditors to initiate insolvency proceedings. This ruling strengthens the position of creditors under the Insolvency and Bankruptcy Code, 2016, ensuring that procedural technicalities do not frustrate their rights to take recourse through insolvency proceedings. It also places greater responsibility on auditors and accountants, as financial statements may now carry significant consequences for both debtors and creditors by operating as binding acknowledgements of liability.
Continue Reading Fresh Start: Balance Sheet Entries Read With Supporting Records Constitute Debt Aknowledgement, Resets Limitation







