Status as on 12/07/2019
Under the new insolvency and bankruptcy code, 2016, under section 7 of the code, the financial creditor can file the insolvency petition before the NCLT for initiating the corporate insolvency resolution. After the insolvency petition has been admitted an insolvency resolution professional is appointed and as it is a time-bound process, if there is any chance of revival of the company it is should be completed within 270 days and if there is no chance of revival, than the order of liquidation of the corporate debtor will be passed.
In under the above law, in the year 2018, the parliament passed an amendment to the Insolvency and bankruptcy code allowing the homebuyer to be treated as a financial creditor, in other words, on par with banks. As the amount paid by the homebuyers now constitutes a financial debt, any delay in handing over of the property as per the commitments in the sale agreement can be grounds for initiating the corporate insolvency resolution proceedings under the IBC.
As the majority of the builders have not delivered the possession of the property as promised made by them and breached the terms and conditions on the agreement executed with the homebuyers, till now the NCLT Chennai bench had admitted the insolvency petitions for initiating the corporate insolvency resolution against the 17 builders. In three cases of builder, Antony Projects P. Ltd, LCS City maker P. Ltd, AND RRP Housing P. Ltd the Chennai NCLT Bench has passed the order of Initiation of corporate insolvency resolution process and appointed an insolvency resolution professional, and within a time frame of 270 days to find the way for revival of the aforesaid builders and if there no now chance of revival then the company have to face the liquidation. As the Insolvency and bankruptcy code, 2016 is a time-bound code the builder cannot just keep the matter pending before the court for so long.
Therefore, In light of the above case it can be inferred that if the case of the builders are breaching the terms and conditions of builder buyer agreement and failed to deliver the possession as per the flat buyer agreement then under section 7 OF the Insolvency and bankruptcy code, 2016 the homer can approach the NCLT for initiation of insolvency resolution process.