Acknowledgment of liability in accounts extends limitation and defeats an unsupported winding-up defence against an enforceable debt.

A written balance confirmation or statement of accounts issued by the debtor can amount to an acknowledgment of liability and extend limitation under Section 18 of the Limitation Act, 1963. In this winding-up context, the court treated the petitioner's inter-corporate deposit documents, repayments, and account confirmation as evidence of a subsisting debt, and drew an adverse inference from the respondent's failure to produce its own books to rebut them. The defence was found not bona fide, the debt remained enforceable, and the limitation objection failed. The winding-up petition was therefore admitted, with a provisional liquidator appointed and limited abeyance granted to allow payment of the admitted amount.

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Issues: Whether the petitioner had established a subsisting debt and a bona fide basis for winding up under Sections 433(e) and 434(f) of the Companies Act, 1956, and whether the plea of limitation was defeated by acknowledgment in writing under Section 18 of the Limitation Act, 1963.

Analysis: The petition was founded on an inter-corporate deposit, subsequent repayments, and a balance confirmation and ledger statement allegedly issued by the respondent showing an outstanding liability. The respondent denied the authenticity of the ledger confirmation but did not produce its own books of account or other material to rebut the documents relied upon by the petitioner. The Court drew an adverse inference from the withholding of the best evidence and found the respondent's defence not bona fide. The Court further held that the statement of accounts and balance confirmation constituted acknowledgment of liability in writing, thereby extending limitation under Section 18 of the Limitation Act, 1963.

Conclusion: The petition was maintainable and the debt remained enforceable; the limitation objection failed and the respondent had not raised a bona fide defence.

Final Conclusion: The winding up petition was admitted, a provisional liquidator was appointed, and the order was kept in abeyance for a limited period to enable payment of the admitted outstanding amount.

Ratio Decidendi: A written acknowledgment of liability contained in the debtor's own balance confirmation or statement of accounts extends limitation, and a winding up defence that is unsupported by the debtor's best available records may be rejected with adverse inference.

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