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

Ms. Tara Nair's firm obtained a moratorium order under Part III, during which the period for filing a recovery suit in the debtor's name would have expired under the Limitation Act, 1963. The moratorium lasted 150 days. How is limitation computed for that suit?

The entire period of the moratorium is excluded when computing limitation for a suit or application filed in the debtor's name and on its behalf, notwithstanding the Limitation Act, 1963 or any other law. So all 150 days are excluded.

  1. ALimitation runs normally since the Limitation Act overrides the Code
  2. BThe moratorium period is excluded in computing limitation for suits or applications in the debtor's nameCorrect
  3. COnly the first 90 days of the moratorium are excluded
  4. DLimitation is extended by a flat one year

Explanation

Section 179(3) says that notwithstanding the Limitation Act or any other law, the period during which the moratorium is in place is excluded when computing limitation for any suit or application in the name and on behalf of the debtor. The full 150 days are excluded, not a part or a flat year.

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