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

Anita, an individual debtor, files an application under section 94 on 1 June. The Adjudicating Authority admits it on 20 June. A suit by a creditor against Anita over a loan, pending since last year, was affected by the moratorium. What is the position of the interim moratorium?

The interim moratorium ran from the application date, 1 June, to the date of admission, 20 June. During that period the pending suit about the debt was deemed stayed and creditors could not start fresh proceedings in respect of any debt.

  1. AIt commenced on 1 June and ceased on 20 June, staying the pending suit in respect of the debt in betweenCorrect
  2. BIt commenced on 20 June and continues until the bankruptcy order
  3. CIt commenced on 1 June and continues until the discharge order
  4. DIt commenced on 1 June but does not stay pending proceedings, only new ones

Explanation

The interim moratorium commences on the date of the application and ceases on the date of admission. During it, pending legal actions in respect of any debt are deemed stayed and creditors cannot start new ones. So the last option is wrong because pending proceedings are stayed too.

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