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CS Professional · Corporate Restructuring, Valuation and Insolvency · Cross Border Insolvency

Orion Components Pvt Ltd is under moratorium in CIRP from 1 April. A supplier had a claim on which it could have sued, and the limitation period was running. The moratorium lasted 200 days. How does Section 60 treat this period when computing limitation for a suit or application by or against Orion?

The whole moratorium period of 200 days is excluded in computing limitation for any suit or application by or against the corporate debtor. The Code overrides the Limitation Act, 1963 on this point, so time does not run during the moratorium and limitation continues afterwards.

  1. AThe 200 days of moratorium are excluded from the limitation periodCorrect
  2. BThe 200 days count fully, as the Limitation Act, 1963 prevails
  3. CLimitation stops permanently once moratorium begins
  4. DOnly half of the moratorium period is excluded

Explanation

Section 60(6) says that notwithstanding the Limitation Act, 1963 or any other law, the period during which the moratorium is in place is excluded when computing limitation for a suit or application by or against the corporate debtor. So all 200 days are excluded, not half, and limitation resumes afterwards.

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