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

Kiran Pharma, a sole proprietor, was granted a moratorium under Part III for 180 days. During this period, a suit that Kiran Pharma wished to file in its own name to recover a debt would have become time-barred. How is the moratorium period treated when computing limitation for that suit?

The moratorium period is excluded when computing limitation for a suit or application filed in the debtor's name. The Code applies this notwithstanding the Limitation Act, 1963 or any other law, and it covers both suits and applications without needing any separate extension.

  1. AIt is counted, as the Limitation Act, 1963 prevails over the Code
  2. BIt is excluded, notwithstanding the Limitation Act, 1963 or any other lawCorrect
  3. CIt is excluded only if the Tribunal separately extends limitation
  4. DIt is excluded only for applications, not suits

Explanation

In computing the limitation period 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. This applies notwithstanding the Limitation Act, 1963 or any other law, and covers both suits and applications. No separate Tribunal extension is required.

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