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CS Professional · Insolvency and Bankruptcy - Law and Practice · Adjudication and Appeals for Corporate Persons

Kaveri Pharma Ltd is under moratorium in CIRP. A supplier had a recovery suit against Kaveri with a limitation period expiring during the moratorium. How does the Code treat the limitation computation for suits or applications by or against the corporate debtor?

The moratorium period is excluded when computing limitation for any suit or application by or against the corporate debtor. This applies in both directions and overrides the Limitation Act, so the supplier's limitation does not run while the moratorium is in force.

  1. AThe period during which the moratorium is in place is excluded in computing limitationCorrect
  2. BLimitation continues to run during the moratorium without any exclusion
  3. CLimitation is extended by exactly thirty days after the moratorium ends
  4. DLimitation is excluded only for suits by the corporate debtor, not against it

Explanation

Section 60(6) says that, notwithstanding the Limitation Act, the moratorium period is excluded in computing limitation for any suit or application by or against a corporate debtor. It covers both directions, so the one-sided option is wrong and no fixed thirty-day extension applies.

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