Outstadning liability in previous year balance sheet

Dr. Liability

Cr. Bank 

If the payment is met. 

If the other msme creditor went bankrupt as a result of this outstanding liability

Dr. Liability

Cr. Gain 

Can specific journal entry be mentioned.

AMC amount o/s in Balance sheet 31 Mar 21 and 31 Mar 22

what entry to make to now so that it does not reflect on 31 Mar 23 Balance sheet.

The liability never existed and was wrongly shown, debited in P and L accounts and Balance sheets earlier.

Without a compensating entry, the balance sheet doesn't tally. So try and trace the transaction. Then reverse the entries. 

Next, if you can't find that transaction

Dr. AMC liability

Cr. Suspense account

Until Then

Payables is usually associated with equity or income statement. So start searching from there.

If you still can't find it

Dr. Suspense 

Cr. Foregone payments (or create your own head or use company act schedule)