The apex court held that the Code isn’t a machinery for recovery though its usage in several perspectives still be within the nature of a recovery system.
IBC was introduced to reorganise, restructure or to consolidate the existing framework into a single law for the purpose of Insolvency and Bankruptcy.
The Hon’ble Supreme Court in its latest judgement dated February, 11 2021 declared that the proceedings under Article 32 of the Constitution by a purchaser, seeking relief in respect to a real estate project cannot be entertained.
NCLT and RERA have different functioning and approach to tackle cases of homebuyers, often homebuyers are confused on which remedy to choose.
The appeal before the Apex Court was filed by the bunch of employee’s union against the impugned judgment of the Rajasthan High Court whereby, the High Court refused to transfer the winding up proceedings before the NCLT, and further set aside an order passed by the NCLT initiating the CIRP application by virtue of section 7 application filed by the Financial Creditor.
Homebuyers who had taken a loan from the banks to pay for their flats in the Project, were being harassed by the banks who were forcing the homebuyers to pay their EMIs.
IBC undoubtedly appears to be a better alternative in comparison to RERA. IBC offers a time bound resolution of the grievance of the homebuyers.
an Insolvency Professional having all the aforementioned requirements may be chosen as An IRP for the corporate debtor. However it may have an advantage over other IRP if the person had already dealt in that specific industry being an RP/IRP.
There are certain points which are to be taken into consideration whilst filing a petition for the homebuyers under the newly amended Section 7 of IBC.
Reverse Insolvency Under IBC laws, seems best solution for struck real estate projects and Reverse Insolvency concept is kind good for both homebuyer and builder
The homebuyers who have got RERA refund orders and if builder has defaulted in making the payment, you can file case before NCLT under IBC laws
The NCLAT held that CIRP against Real Estate Company shall be limited to Project concerned and will not affect other projects of the developers.
Whether the delay in delivering possession is due to the Corporate Debtor & in case the delay is not due to the Corporate Debtor, but force majeure, it cannot be alleged that the Corporate Debtor has defaulted in delivering the possession.
Homebuyers who have been stuck due to CIRP and were unable to move before any court/ forum can now finally feel relieved and move before the developer company for any grievance.
The Ministry of Corporate Affairs may soon likely to move amendments to the code, including protection for new buyers and tighter norms for home buyers in terms of taking developers to the NCLT.