A debtor’s own balance sheet can keep a money claim alive. If the debt keeps appearing in its books year after year, each entry can be an acknowledgment of liability under Section 18 of the Limitation Act, 1963, and limitation starts afresh from it. The Supreme Court said so in Yusuf v. Vigyapan Loke Delhi Advertising CGHS Ltd., 2026 INSC 1207, decided on 6 November 2026. It revived a contractor’s recovery suit filed in 2014 for bills of 2000 to 2003, which the Delhi High Court had thrown out as time-barred at the very start.
Case at a glance
- Case: Yusuf v. Vigyapan Loke Delhi Advertising CGHS Ltd.
- Citation: 2026 INSC 1207; 2026 LiveLaw (SC) 1149
- Arising from: SLP (C) No. 30778 of 2024
- Bench: Justice Vikram Nath (author), Justice Augustine George Masih and Justice Sandeep Mehta
- Date: 6 November 2026
- Result: Appeal allowed. The Delhi High Court’s order rejecting the plaint was set aside, and the suit was revived before the trial court.
Facts
- The plaintiff built a multi-storey building in Mayur Vihar, Delhi, for the defendant housing society. He relied on running bills raised between 2000 and 2003.
- In 2014, he filed a summary suit under Order XXXVII CPC for ₹11,16,000 in principal and ₹11,04,840 as interest at 9% a year, with interest going forward.
- To meet limitation, he relied on the society’s balance sheets from 2004-05 to 2013, which carried the outstanding amounts, and on bank reconciliation statements recording cheques issued to him.
- The society applied under Order VII Rule 11 CPC to reject the plaint as time-barred. The trial court dismissed that application on 6 January 2020, holding that the balance sheet entries were acknowledgments that gave a fresh period of limitation.
- On 4 November 2024, the Delhi High Court allowed the society’s revision (C.R.P. No. 66 of 2020) and rejected the plaint. It held that nothing showed the society had acknowledged the liability after 2005.
What the Supreme Court said
1. Each acknowledgment restarts limitation
Under Section 18, a written acknowledgment of a subsisting liability, signed by the party, gives a fresh period of limitation, counted from the date of the acknowledgment (paras 9 and 14).
2. Balance sheet entries can be acknowledgments
Following Asset Reconstruction Company (India) Ltd. v. Bishal Jaiswal (2021) and Axis Bank Ltd. v. Naren Sheth, the Court held that entries in books of account, including balance sheets, may constitute an acknowledgment. The balance sheet has to be read as a whole, along with its notes and the auditor’s report (paras 10 and 11).
3. Here, the liability was carried forward till 2013
The cheques, the 2004-05 balance sheet entries and the surrounding facts showed a liability that the society’s own balance sheets carried forward to 2013. Each later acknowledgment started a fresh period, so no application for condonation of delay was needed (paras 12 to 14 and 16).
4. Order VII Rule 11 is not the stage to weigh evidence
On an application to reject the plaint, the court only asks whether the plaint discloses a prima facie case. The High Court went into the evidence when it should not have (para 15).
5. Merits left open
The Court made clear that the entries do not conclusively prove the full amount claimed. How the cheques and the carried-forward figures connect to the sum claimed needs evidence at trial. “All questions on the merits of the claim shall remain open” (paras 15 and 17).
The law in short
- Section 18, Limitation Act: an acknowledgment of liability in writing, signed by the party, made before the limitation period expires, starts a fresh period from the date it was signed. A later acknowledgment, made within that fresh period, extends it again.
- Balance sheets: a company’s or society’s balance sheet showing the amount as owed can be such an acknowledgment. Whether it is depends on the entry read with the notes and auditor’s report.
- Order VII Rule 11 CPC: a plaint can be rejected as time-barred only when that appears from the plaint itself. A disputed limitation question based on documents goes to trial.
Why it matters
- For creditors and contractors: an old unpaid bill is not necessarily dead. Get the debtor’s balance sheets; if the dues are shown year after year, limitation may have been renewed each time.
- For companies and societies: carrying a disputed or old liability in the accounts, without qualification, can keep it alive for years.
- For litigators: a limitation objection that needs the court to weigh balance sheets and bank records is a matter for trial, not for rejection of the plaint.