The Insolvency and Bankruptcy Code, 2016 (referred as “IBC”)was introduced with the objective of restructuring and reviving a company in distress by maximizing the value of the assets and for the promotion of entrepreneurship. The benefit of the same has been enjoyed the most by the homebuyers of the projects; as after the Insolvency Laws were introduced a sigh of relief was taken by the homebuyers.
In other words, the errant builders who otherwise were taking the shelter of the slow execution process under RERA laws to save their projects and their illegal money, were now under direct scrutiny of the Hon’ble National Company Law Tribunal (referred as “NCLT”)wherein the default committed by the builder can land him under the Corporate Insolvency Resolution Process (referred as ‘CIRP’), wherein the entire company would revived and restructured again under the guidance of Interim Resolution Professional and the Hon’ble NCLT.
Joint Application by Homebuyer
The homebuyers collectively can now take the Builder/Corporate Debtor before the Hon’ble NCLT under Section 7 of IBC, for the default committed, being in the group of either 10% of the total allottees of the project or total of 100 homebuyers of a project under the newly amended Section 7 of IBC. The process as it looks is a really tiring and cumbersome one, as apart from getting 10% or 100 homebuyers of a project together, collecting documents and making their representations before the Court is another process.
Such type of litigation has been recently introduced in the practice, which makes a problem for most of the firms and advocates. Thus it is really important that the advocate representing the homebuyers should be an all-rounded in all the aspects. As it is the case representation and arguments before the Hon’ble Tribunal which will take your case ahead of others, in case you are not being represented well before the Hon’ble Tribunal, the Bench may not be able to understand your grievance and may pass an order against yourself.
Thus, the homebuyers while choosing their advocates/legal firms must be very cautious and should keep in mind the followings the points:
- The legal firms must have thorough knowledge of real estate industry and its mode-operandi
- The legal firm must have a thorough knowledge Insolvency and Bankruptcy Code, Reverse Insolvency, and Project based Insolvency
- It would be great if any Insolvency Professional who has undertaken any insolvency process for Real Estate industry, is the advisor to the legal firm.
- The legal firm must be having good practice before the Hon’ble NCLT and NCLAT related to the related industry.
- The legal firm must also have the relevant knowledge and practice of RERA for real estate.
- The legal firm must have a good team to handle a group.
- The legal firm must have good arguing and representation skills before the court.
Since the relevant builder would try its best to dismantle the group, hence, homebuyers while filing the joint petition before NCLT under IBC laws, should chose the legal firm very carefully. To conclude it, the relevant legal firm has experience and in-depth knowledge of real estate. The guidance of Insolvency is very compulsory.
Disclaimer- The above article is based on the interpretation of the related laws and judicial pronouncements. The readers are expected to take legal advice before relying on this article. The author can be reached at firstname.lastname@example.org or call the IP expert at 8383011629