Skip to content

CS Professional · Insolvency and Bankruptcy - Law and Practice · Insolvency Resolution of Individuals and Partnership Firms

Asha Gupta, an individual debtor in Lucknow, has a moratorium in force under Part III. Her pending recovery suit against a customer would otherwise become time-barred in two months, but the moratorium will last longer. How does the Code treat the limitation period for that suit filed in her name?

The period during which the moratorium is in place is excluded when computing limitation for a suit or application made in the debtor's name and on behalf of the debtor. This applies notwithstanding the Limitation Act, 1963, so limitation does not run during the moratorium.

  1. AThe period during which the moratorium is in place is excluded in computing limitationCorrect
  2. BLimitation continues to run and the suit becomes time-barred
  3. CLimitation stops permanently once the moratorium ends
  4. DLimitation is extended by a flat six months irrespective of the moratorium

Explanation

Notwithstanding the Limitation Act, 1963, in computing the limitation for any suit or application in the name and on behalf of a debtor for which a moratorium has been ordered under this Part, the moratorium period is excluded. Limitation therefore does not run during the moratorium.

Did you get it right without looking?

One question tells you little. A timed set on Insolvency Resolution of Individuals and Partnership Firms shows your real accuracy, how long you take and where you lose marks.

Practise Insolvency Resolution of Individuals and Partnership FirmsFree diagnostic mock

More Insolvency Resolution of Individuals and Partnership Firms questions