The main purpose of the Act lies in enhancing the Transparency between buyer and builder and creating a strong adjudicating system for the disputes arising in real estate sector. An aggrieved homebuyer seeks right legal remedy after getting exploited by the builder.
In response to the damage done to the economy the Indian Government has placed certain embargoes and granted certain grace periods to help reduce the financial strain caused by the complete shutdown of the economy this includes the three month moratorium that has been given by the RBI regarding payments of EMI.
RCOM has decided to adopt the fast track insolvency process to get over this debt-laden battle and has filed insolvency petition voluntarily under section 10 of Insolvency and Bankruptcy Code, 2016 (IBC).
The code is not applicable to corporates in finance sector. Thus no petition shall be entertained by NCLT filed against Banks, Financial Institutions, Insurance Company, Asset Reconstruction Company, Asset Reconstruction Company, Mutual Funds, Collective Investment Schemes or Pension Funds.
In case of financial creditor being an applicant to the insolvency process, an application would be made to Adjudicating Authority and a copy of such application would be sent to the corporate debtor.
Home buyers who had invested in housing projects by JIL, were permitted by the Interim Resolution Professional (IRP) to submit their claims as ‘other creditors’, subordinate to financial and operational creditors of JIL.
The Essar Steel matter has raised a valid and crucial point of inordinate delays which is a big concern as it was the important provision of IBC, time bound resolution. If this purpose fails, the whole motive of IBC will fall apart.
Once NCLT has issued moratorium under section 14 of Insolvency Code in respect of Company in liquidation, Bank cannot pursue proceedings for recovery of loan.
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