Supreme Court Rules Balance Sheet Entries Acknowledge Debt

The Supreme Court ruled that balance sheet entries can serve as an acknowledgment of liability under Section 18 of the Limitation Act, 1963. This decision allows for a fresh period of limitation in legal cases. The ruling came while overturning a Delhi High Court order that had dismissed a plaint as time-barred, restoring the suit to the trial court. The case involved a summary suit filed in 2014 for recovery of over Rs 11 lakh related to a civil works contract for constructing a multi-storey building in Delhi. The original plaintiff relied on running bills from 2000 to 2003, while the defendant argued the suit was time-barred. The trial court had previously noted that the outstanding amounts were recorded in the defendant's balance sheets from 2004 to 2013, which constituted an acknowledgment of debt.