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CS Professional · Insolvency and Bankruptcy - Law and Practice · Bankruptcy Order for Individuals and Partnership Firms

A debtor obtains a moratorium order under Part III. A suit that the debtor would have filed in his own name has a limitation period running during the moratorium. What does section 179(3) provide?

The period during which the moratorium is in force is excluded when computing limitation for suits or applications in the debtor's name. Section 179(3) applies this notwithstanding the Limitation Act, 1963, so the moratorium time does not count against the debtor.

  1. AThe period during which the moratorium is in place is excluded when computing limitationCorrect
  2. BLimitation continues to run unaffected by the moratorium
  3. CLimitation is extended by exactly one year
  4. DThe suit is barred permanently

Explanation

Section 179(3) says that, notwithstanding the Limitation Act, 1963, in computing limitation for any suit or application in the name and on behalf of a debtor for which a moratorium has been ordered, the moratorium period is excluded. A fixed one-year extension is not what the text provides.

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