In a suit/application by corporate debtor, a moratorium period can be excluded in computing limitation period in the IBC: Supreme Court

New Delhi Municipal Council vs Minosha India Limited observed that while computing the period of limitation for a suit or proceeding by the corporate debtor further the court noted that the entire period during which the moratorium was in force in respect of corporate debtor can be excluded. an application under Section 11(6) of the 1996 Act by the corporate debtor or for that matter, any other proceeding by the corporate debtor against another party does not include Section 14 (moratorium), the court noted when a Moratorium ushered in by an order under Section 14 does not pose any bar against a suit or an application at the instance of the corporate debtor at the instance of the corporate debtor and it is also being highlighted the ambiguity regarding the need to exclude the period of limitation for a suit or an application by the applicant it is not impossible to contemplate that the resolution professional for whatever reason it may be, does not discharge his duties and conduct proceedings in all matters as he should while it may be true that proceedings by the corporate debtor through the resolution professional is contemplated furthermore the bench noticed that applications at the instance of the corporate debtor under Section 60(6) this can be the rationale for the Law Giver excluding the period of limitation in regard to suits or applications at the instance of the corporate debtor under Section 60(6). It is intended to bring a corporate debtor back to life, if possible, ‘a period of calm’, in the words of the respondent as an application under Section 7, 9 or 10 of the IBC, 2016 does bring in a period but during which the management of the corporate debtor is displaced, ironically, a period of turbulent churning was observed by the Bench comprising of Justice KM Joseph and the justice Hrishikesh Roy noted. the period during which such moratorium is in place shall be excluded or any suit or application by or against a corporate debtor for which an order of moratorium has been made under this Part or any other law for the time being in force, in computing the period of limitation specified for as provided under Section 60(6) of the Limitation Act, 1963. the application filed by respondent corporate debtor under Section 11(6) of the Arbitration and Conciliation Act. The appellant, had approached the Apex Court challenging the Delhi High Court’s order in the abovementioned case.

Recommended For You

About the Author: - -