Acknowledgment of liability in balance sheet can extend limitation and support winding-up despite a separate civil recovery remedy.

An acknowledgment of liability in a balance sheet or written reply can extend limitation for a winding-up petition, and a separate civil remedy for recovery does not bar insolvency-style winding-up proceedings. On the facts, the company's balance sheet showed the petitioner as a creditor and the liability was also admitted in a director's reply to the Registrar of Companies, so the petition was treated as within time and maintainable. The attempt to recall, review and seek condonation of delay in relation to the admission and winding-up orders failed because the respondent had knowledge of the proceedings, received repeated opportunities, and offered no satisfactory explanation for the delay. The winding-up orders were sustained.

---

---

Issues: (i) Whether the respondent was entitled to recall or review the orders admitting and winding up the company and to have delay in filing those applications condoned; (ii) Whether the company petition was maintainable and within limitation on the basis of the respondent's acknowledgment of liability in its balance sheet and reply.

Issue (i): Whether the respondent was entitled to recall or review the orders admitting and winding up the company and to have delay in filing those applications condoned.

Analysis: The record showed repeated opportunities and publication of citations after admission of the company petition. The respondent had knowledge of the proceedings and of the hearing dates, yet remained absent and approached the Court only much later. The delay was not satisfactorily explained and the absence of counsel was not accepted as a sufficient ground in the facts of the case. The earlier admission order also merged in the subsequent winding-up order.

Conclusion: The applications for recall, review and condonation of delay were not maintainable on the facts and were rightly rejected.

Issue (ii): Whether the company petition was maintainable and within limitation on the basis of the respondent's acknowledgment of liability in its balance sheet and reply.

Analysis: The respondent's balance sheet for the relevant year showed the petitioner as a sundry creditor, and the liability was also admitted in the reply sent by a director to the Registrar of Companies. Such acknowledgment in writing satisfied the requirements of limitation law. The availability of a civil remedy did not bar a winding-up petition, because recovery proceedings and winding-up proceedings operate in different fields. The liability and inability to pay debts were, therefore, sufficiently established for winding-up purposes.

Conclusion: The company petition was held to be maintainable and within time, and the winding-up orders were sustained.

Final Conclusion: No ground was made out to interfere with the earlier company-court orders, and the respondent's challenge failed in entirety.

Ratio Decidendi: An admission of liability in a balance sheet or written reply can constitute acknowledgment for limitation purposes, and a winding-up petition is maintainable notwithstanding the existence of a separate civil remedy for recovery of the same debt.

---