Relief to SBI, Absence of Creditor's Name in Balance Sheet Does Not Vitiate Acknowledgment of Debt: NCLT [Read Order]
Although SBI was not specifically mentioned in the balance sheets, the bench noted that the values displayed aligned with the debt that was admitted on the balance sheet
![Relief to SBI, Absence of Creditors Name in Balance Sheet Does Not Vitiate Acknowledgment of Debt: NCLT [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/04/Relief-to-SBI-Absence-of-Creditors-Balance-Sheet-Balance-Sheet-Does-Not-Vitiate-Acknowledgment-taxscan.jpg "Relief to SBI, Absence of Creditors Name in Balance Sheet Does Not Vitiate Acknowledgment of Debt: NCLT [Read Order]")
In a ruling in favour of State Bank of India, the National Company Law Tribunal (NCLT), Kolkata, special bench observed that the absence of the financial creditor's name in the corporate debtor's balance sheet does not vitiate the acknowledgment of debt if the figures shown are consistent with the debt acknowledged in the balance sheet. Read More: Setback for Infosys: CESTAT Rules...
In a ruling in favour of State Bank of India, the National Company Law Tribunal (NCLT), Kolkata, special bench observed that the absence of the financial creditor's name in the corporate debtor's balance sheet does not vitiate the acknowledgment of debt if the figures shown are consistent with the debt acknowledged in the balance sheet.
Under Section 7 of the IBC, the State Bank of India (SBI) petitioned the adjudicating authority to start CIRP against the corporate debtor. The corporate debtor was accused by the financial creditor of owing Rs. 111.7 for credit facilities that were approved and extended between 2008 and 2014. The accounts were then designated as non-performing assets ( NPAs ) on March 31, 2014, and on September 02, 2015, the financial creditor sent out a demand notice.
The financial creditor examined the balance sheet that the corporate debtor had provided for the fiscal years ending March 31, 2016, 2018, 2020, and 2021, in which the corporate debtor acknowledged that it had fallen behind on repaying the loan from the financial creditor. According to Section 18 of the Limitation Act, the petitioner argued that every recognition on the balance sheet would be taken to be an acceptance of debt.
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The financial creditor also argued that, in accordance with Section 18 of the Limitation Act, the One Time Settlement letter (OTS), in which it is acknowledged that the obligation is owed to the financial creditor, ought to be regarded as an acceptance of debt. The corporate debtor argued, however, that the revival letter makes no reference to the default or the quantum. Additionally, the name of the financial creditor—State Bank of India—is not mentioned on the balance sheets. Additionally, the respondent emphasized that the OTS proposal is unable to extend the long-expired limitation.
The bench, consisting of Smt. Bidisha Banerjee (Judicial Member) and Shri Sameer Kakar (Technical Member), noted that the corporate debtor unambiguously acknowledged debt and default by admitting that an OTS proposal was presented to the financial creditor.
Although SBI was not specifically mentioned in the balance sheets, the bench noted that the values displayed aligned with the debt that was admitted on the balance sheet. The bench decided that the recognition of debt in the balance sheet and OTS for CIRP purposes lawfully extends the limitation under Section 18 of the Limitation Act. The application for CIRP was accepted after the adjudicating body noted that all debt, default, limitation, and threshold requirements were satisfied.
To Read the full text of the Order CLICK HERE
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