Unconditional acknowledgment of liability in a company’s balance sheet warrants a judgment on admission.

The plaintiff (respondent) filed a suit against the appellant for unpaid dues arising from a purchase order dated September 27, 2017.

The appellant contended that the transaction was introduced by ILFS Engineering Limited (ILFS), which underwent Corporate Insolvency Resolution Process (CIRP).

The appellant argued that since the plaintiff’s claims were purportedly settled or subjected to a "haircut" in the ILFS CIRP, a triable issue existed.

The plaintiff moved an application for judgment on admission based on the appellant’s financial records.

A Single Judge of the High Court allowed the judgment on admission, which was subsequently challenged in this appeal.

Prior to the hearing, the appeal had been dismissed for default on February 5, 2026, and the current proceeding involved its restoration and final disposal.

1. Whether the appeal dismissed for default on February 5, 2026, should be restored.

2. Whether the inclusion of a debt in the balance sheet of a company constitutes an unconditional admission of liability for the purpose of a judgment on admission.

3. Whether a subsequent claim of a "triable issue" based on third-party insolvency proceedings can override a direct acknowledgment of debt in a company's financial statements.

The court applied the principles governing Judgment on Admission under the Commercial Division's jurisdiction, specifically focusing on the evidentiary value of a Balance Sheet.

It relied on the principle that an entry in a Balance Sheet constitutes an acknowledgment of liability under the Limitation Act and procedural laws, provided it is not qualified by any caveat or explanatory notes.

Furthermore, the court applied the "triable issue" test, holding that a defense which is "moonshine" or contradicts the defendant's own unconditional documentary admissions does not warrant a full trial.

The Court first restored the appeal, accepting the medical and professional grounds provided for the previous non-appearance.

On the merits, the Court rejected the appellant's argument that the ILFS CIRP created a triable issue.

The Court observed that the appellant’s Balance Sheet dated March 31, 2023, reflected a liability of 65.29 lakhs toward the plaintiff.

This acknowledgment was found to be "unconditional" and "not qualified by any notes".

The Bench reasoned that since the Balance Sheet acknowledgment was made *subsequent* to the ILFS CIRP, the appellant’s plea that the debt was "wiped off" or settled in those proceedings was factually unsustainable and legally inconsistent.

The Court found the appellant’s defense to be "moonshine" because the appellant had consistently admitted the debt over a period of time in its statutory filings.

It held that an unconditional acknowledgment in a Balance Sheet serves as a clear admission of liability, and a debtor cannot later claim a "triable issue" based on external arrangements that contradict their own audited financial statements.

Therefore, the judgment on admission was correctly granted.

The application for restoration (GA-COM/3/2026) was allowed, but the main appeal (APDT/30/2025) was dismissed without costs.