Status as on- 29/07/2020
There have been numerous cases where housing projects have either been shelved or have been completely abandoned or stalled. The reason for such struck projects can be one single factor or can be multiple factors. It may be due to builder going to jail, it may be misappropriation of funds by builder it may be due to any other malafide intentions of the developer/builder. The end result being the project is struck and thus harming the rights of thousands of homebuyers.
The question is whether this is the end for such projects or there is something that you as homebuyer can do?
SECTION-7 IBC, 2016
The answer to this question is yes, you can revive the project under Section-7 of the IBC, 2016. The point is how and in what manner? The answer to that by initiating the procedure for Corporate Insolvency Resolution Process (CIRP).
What is CIRP?
It is process in which the management of the Company including the directors is removed and given in the hands of well-qualified professional known as “Resolution Professional”. He takes over the management and the charge of the Company and then a committee of creditors is formed which includes financial creditors and let us tell you that under Section-7 of the Code, Homebuyers are termed as Financial Creditors and thus they get a substantial say in the Committee.
After that resolution plans are invited by other companies to infuse funds and revive the Company and home-buyers get to vote whose Company plan should be implemented. This way a cash rich company gets to put plans to revive the Company and the project which would have been stalled for years now.
It may or sound confusing but let us tell you this procedure is a time bound process and it also gives right to buyers to vote to bring in a new company for revival. It is transparent method and is done keeping in mind the stake of Buyers. It is quick, efficient and result oriented. There has been no or little knowledge about the functioning of IBC but let us assure you that we have done many matters under IBC and have ended up getting justice for all our home-buyers clients.