The Supreme Court on May 11, 2022 in the matter of New Delhi Municipal Council v. Minosha India Limited held that the entire period during which the moratorium was in force in respect of corporate debtor can be excluded while computing the period of limitation for a suit or proceeding by the corporate debtor.

In this case, the appellant had approached the Apex Court challenging the Delhi High Court’s order allowing the application filed by respondent corporate debtor under Section 11(6) of the Arbitration and Conciliation Act 1996 (“the 1996 Act”). The issue raised in the appeal was whether Section 60(6) of the Insolvency and Bankruptcy Code (“IBC”) gives rise to a new lease of life to a proceeding at the instance of the corporate debtor on the basis of a moratorium which is put in place by virtue of the order passed under section 14 of the IBC and whether corporate debtor can take advantage of the same to bring the application in this case filed under Section 11(6) of the Arbitration Act? According to appellant, there is no warrant for exclusion of the period for a suit or proceeding by the corporate debtor.

The Court noted that Section 14 of IBC (moratorium) does not include 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. Referring to the scheme of insolvency proceedings, the Bench observed:

“The words for which an order of Moratorium has been made under this part is intended to be the point of reference or the premise for the exclusion of the time for the purpose of computing the period of limitation. Besides being the point of reference and being the sine qua non for applying Section 60(6), it also specifies the period of time which will be excluded in computing of the period of limitation. In other words, present an order of Moratorium under Section 14, the entire period of the Moratorium is liable to be excluded in computing the period of limitation even in a suit or an application by a corporate debtor.”

Hence, Courts would not indulge in interpretation of a report of a body and when there is better material in the form of the Act itself available for interpretation. The Court held that if the words of a statute are not ambiguous, the scope of interpretation dwindles.