Idea is that acceleration of the lift is 12m/s2 which is greater
than acceleration due to gravity. Hence, when lift starts descending
with this acceleration, block loses contact with the floor and starts
falling under the action of gravity.
Thus, acceleration of the block = acceleration due to gravity = 10 m/s2 (downward)
Hence using s = ut + ½ at2 along downward direction, we
have s = 0 x 0.2 + ½ x 10 x 0.22
i.e. s = 0.2 m = 20 cm.