TMI Blog1973 (6) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... ter interest had accrued due to the petitioner and the petitioner has filed this petition for a claim of ₹ 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 shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned 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., AIR1962Cal115 , 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 acknowledg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d he noted that against the said entry there is a statement 'unconfirmed'. It appears that similar entry was there in the case of Darjeeling Commercial Co. Ltd v. Tandam Tea Co. Ltd. which was the subject-matter of the judgment delivered by Ghose. J., referred to hereinbefore. This aspect of the matter had also been considered and it was held by the learned Judge that this made no difference in making the acknowledgment. But apart from the said statement the Director's report in this case contained the following statement: Your Directors are of the opinion that the liabilities shown in Schedules 'A' and 'B' of the Balance Sheet excepting those of United Bank of India. M/s. Goenka and Co. Private Ltd. and Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reholders can-not be accepted as correct. Therefore, in order to validate the balance-sheet, it must be duly passed by the shareholders at the appropriate meeting and in order to do so it must be accompanied by a report, if any made by the Directors. Therefore, even though the balance-sheet may be a separate document these two documents in the facts and circumstances of the case should be read together and should be construed together, It was held by the Supreme Court in the case of L. C. Mills v. Aluminium Corpn of India Ltd., [1971]2SCR623 , that it was clear that the statement on which the plea of acknowledgment was founded should relate to a subsisting liability as the section required and it should be made before the expiration of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hael Thieyyol. AIR 1952 Trav-Co 518 ; Chhaterdhari Mahto v. Nasib Singh. Karmadai Naickeon v. R. Raju. AIR 1949 Mad 401. It is not necessary in my opinion to discuss the aforesaid decisions in details. Having regard to the nature of the language used in the directors' report it is not possible to say that there was an acknowledgment of liability by the balance-sheet itself. At least prima facie the defence that there was no acknowledgment of the liability by the company to the petitioning creditor by the statement contained in the balance sheet cannot be described as either un-reasonable or not bona fide. This, however, does not involve a determination of the question whether the claim had become barred by limitation or not. It may be t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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