Yusuf vs Vigyapan Loke Delhi Advertising C.G.H.S. Ltd

2026 INSC 1207
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO……….…..OF 2026
(@SPECIAL LEAVE PETITION (CIVIL) NO.30778 OF 2024)

YUSUF …APPELLANT

VERSUS

VIGYAPAN LOKE DELHI
ADVERTISING CGHS LTD. …RESPONDENT



J U D G M E N T
VIKRAM NATH, J.

1. Leave granted.
2. The present appeal is filed against the judgment and final
order dated 04.11.2024 passed by the High Court of Delhi in
C.R.P. No.66 of 2020 whereby the High Court allowed the
Revision Petition filed by the defendant-respondent and
rejeceted the plaint filed by the plaintiff-appellant as barred by
limitation. For convenience, the parties shall be referred to by
their respective positions before the Trial Court.
3. Brief facts giving rise to the appeal are as follows:
3.1. The original plaintiff, Wazir Hussain, instituted a suit
under Order XXXVII of the Code of Civil Procedure, 1908
(for short, CPC) in 2014 seeking recovery of money due
under a civil works contract dated 10.02.2000. The
contract was entered into by the defendant-society
Signature Not Verified
Digitally signed by
NEETU KHAJURIA
Date: 2026.11.06
17:31:23 IST
Reason:
(hereinafter referred to as ‘defendant’) for construction
C.A. @SLP(C)NO.30778/2024 1

work to be carried out by the original plaintiff in
connection with a multi-story building in Mayur Vihar,
Delhi. He relied on running bills raised between 2000 and
2003 to seek recovery of Rs. 11,16,000/- along with
interest of Rs. 11,04,840/- calculated at 9% p.a., and
pendente lite and future interest at the same rate until
realization.
3.2. The defendant filed an application under Order VII Rule 11
CPC seeking rejection of the plaint. It contended, inter alia ,
that the suit was barred by limitation, did not disclose a
cause of action and was not maintainable in view of alleged
embezzlement.
3.3. By order dated 06.01.2020, the Trial Court rejected the
application. The Court observed that the outstanding
amounts were being reflected in the balance sheets of the
defendant-Society for the years 2004, 2005 till 2013,
which amounts to acknowledgment of debt consequently
giving rise to a fresh period of limitation. It further noted
that the other issues regarding maintainability and
genuineness of bills were questions requiring evidence.
3.4. Aggrieved, the defendant preferred a revision petition
before the High Court. It primarily contended that the suit
instituted in 2014 in respect of transactions dating back
to 2000 and 2003 was barred by limitation.
3.5. By the impugned order dated 04.11.2024, the High Court
allowed the revision petition and rejected the plaint as
being barred by limitation. It observed that the bank
C.A. @SLP(C)NO.30778/2024 2

statements relied upon by the plaintiff did not establish an
acknowledgment of liability extending beyond 2005. It
further noted that there was no balance sheet or any other
document produced by the plaintiff showing any kind of
acknowledgment.
3.6. Aggrieved, the legal heir of the original plaintiff is here
before us.
4. We have heard the learned counsel appearing for the parties
and examined the material placed on record.
5. The limited question before us is whether in the face of entries
of defendant’s balance sheets up to 2013, the suit could have
been rejected at threshold as being barred by limitation.
6. It is not in dispute that the running bills relied upon by the
original plaintiff pertain to the period from 2000 and 2003. The
defendant had also issued cheques in favour of the original
plaintiff, which were dishonoured. The plaintiff’s case,
however, is not founded solely on these transactions. He relies
on the entries in the balance sheets of defendant-Society
which as per him continued to reflect the amounts pertaining
to the financial year 2004-05 up to the financial year 2012-13.
7. The original plaintiff contended that the continued reflection
of these amounts in the Society’s accounts, more particularly
in the entry dated 31.03.2013, constituted an
acknowledgment of liability. On this basis, he asserted that a
fresh period of limitation began from the date of
acknowledgment reflected in the balance sheet entries.
C.A. @SLP(C)NO.30778/2024 3

Therefore, the suit could not have been rejected as being time-
barred.
8. The High Court took note of the bank entries relied upon by
the original plaintiff, however refused to treat them as
acknowledgment of amount due to be payable. It observed that
the balance sheet as on 31.03.2013 reflected an amount of
Rs.21,79,465/- under the head of sundry creditors pertaining
to the year 2004-05, but it did not in any way indicate that the
amount was due and payable to the original plaintiff. It
similarly observed that the balance sheet for 2004-05 and the
bank reconciliation statement which made a reference to the
cheques issued in original plaintiff’s favour, also did not record
any acknowledgment of liability of the Society.
9. In order to understand the effect of the balance sheet entries
of 2013, we have to turn to Section 18 of the Limitation Act,
1963. It states the following:
“18. Effect of acknowledgment in writing.- (1)
Where, before the expiration of the prescribed
period for a suit or application in respect of any
property or right, an acknowledgment of liability
in respect of such property or right has been
made in writing signed by the party against
whom such property or right is claimed, or by any
person through whom he derives his title or
liability, a fresh period of limitation shall be
computed from the time when the
acknowledgment was so signed. …”

Simply stated, a written acknowledgment of a subsisting
liability gives rise to a fresh period of limitation, commencing
C.A. @SLP(C)NO.30778/2024 4

from the date on which the acknowledgment is made. In
effect, the period of limitation is renewed, or extended.
10. In Asset Reconstruction Company (India) Ltd. v. Bishal
1
Jaiswal , a three-judge bench of this Court held that entries
in books of account, including balance sheets, may constitute
an acknowledgment of liability under Section 18 of Limitation
Act. However, it also provided a caveat to the effect that the
said entry must be assessed in the context of the balance sheet
as a whole, including any qualifications or explanations
contained in the accompanying notes or auditor’s report.

11. The same principle was reiterated in Axis Bank Ltd. v. Naren
2
Sheth wherein this Court recognized that Section 18 of
Limitation Act would apply in case of balance sheets
acknowledging a debt.
12. In the present case, the original plaintiff relies on the
defendant-Society’s balance sheet for the year 2004-05 and
the bank reconciliation statements for the same financial year.
The latter explicitly records three cheques issued in favour of
‘Wazir Hussain Contractor’. These entries directly connect the
original plaintiff with the Society’s financial records and
transactions underlying the suit.
13. The plaintiff further relies on defendant-Society’s balance
sheets for the subsequent financial years wherein an amount
of Rs.21,79,134/- continued to be carried forward under the
head ‘Balances pertaining to 2004-05’. As per him, the amount

1
2021 INSC 254.
2
2023 INSC 820.
C.A. @SLP(C)NO.30778/2024 5

claimed in the suit formed a part of the amount reflected in
the balance sheets, read cumulatively with the cheques and
bank reconciliation statements. As such, it constituted an
acknowledgment of liability from 2005 onwards.

14. Section 18 of the Limitation Act does not require that an
acknowledgment be made to the name of the creditor
specifically or be drawn up using a fixed format, so long as it
acknowledges a subsisting liability. The only requirement is
that the acknowledgment, when read in conjunction with the
other circumstances surrounding the transaction, must
indicate a subsisting jural relationship. In the present set of
facts, the surrounding circumstances amply support the claim
of the original plaintiff that a liability existed, that it was
reflected in defendant’s own balance sheets and that the same
continued to be carried forward to the year 2013, renewing the
limitation period every year.
15. The above discussion is not to be read to mean that the entries
conclusively establish that the entire amount as is claimed in
the suit was owed to the original plaintiff. The precise
relationship between the cheques issued, amounts carried
forward and the sum claimed, inter alia , would require
examination of evidence. These are matters for trial. At the
stage of considering an application under Order VII Rule 11
CPC, the Court ought not to have gone into the depths of
evidence and conclusively determined the non-existence of
liability. It was required only to assess whether the plaint
C.A. @SLP(C)NO.30778/2024 6

disclosed a prima facie case on the basis of the material
available.
16. The defendant’s contention that a time-barred debt cannot be
revived indefinitely, more particularly so in the absence of an
application seeking condonation of delay, cannot be sustained.
Since the entries constitute an acknowledgment under Section
18 of the Limitation Act, a fresh period of limitation would
automatically run from each subsequent date of
acknowledgment. In that event, there was no requirement for
an application seeking condonation of delay.
17. In light of the above discussion, we are of the view that the
High Court fell in error in allowing the defendant’s revision
petition and rejecting the plaint as being barred by limitation.
The impugned order is accordingly set aside. The suit shall
stand revived on the file of the Trial Court. All questions on the
merits of the claim shall remain open.
18. The appeal is accordingly allowed.
19. Pending application(s), if any, shall stand disposed of.

…………………………………………..J.
[VIKRAM NATH]

…………………………………………..J.
[AUGUSTINE GEORGE MASIH]


…………………………………………..J.
[SANDEEP MEHTA]


NEW DELHI;
NOVEMBER 06, 2026
C.A. @SLP(C)NO.30778/2024 7