Role of Mediation in the Insolvency Process
Specifically in insolvency proceedings, mediation as a tool can be employed to resolve issues and clear the bottleneck in the resolution process which had led to delays.
Specifically in insolvency proceedings, mediation as a tool can be employed to resolve issues and clear the bottleneck in the resolution process which had led to delays.
The COVID-19 crisis has caused distress and failure in the MSME sector. The insolvency law since its enactment in 2016 has been amended several times in order to protect the interest of MSMEs as well as the future and growth of the Country.
The MahaRERA in three separate orders directed the CCI Projects Ltd to pay interest on delayed period of possession after the ongoing six-month moratorium due to covid-19 crisis is over.
The homebuyers who were to get their homes anytime soon have to now at least wait for another period of 6 months or maybe 9 after the extension of real estate projects’ completion date.
The Ministry of Corporate Affairs had earlier limited initiation of fresh insolvency proceedings for a period of 6 months which now stands extended to 1 year.
COVID19 Emergency-The Indian Economy is already facing a slowdown in growth but this situation to get worse if the countermeasure is not implemented sooner.
Alternatives that an individual home buyer has in cases when the priority is refund and how they can proceed before NCLT or in other words exploit a long standing loophole.
There has been no further clarification as to whether the home buyers are secured financial creditors or unsecured financial creditors, but in consideration of the recent developments, one thing is sure that the result will be in the interest of homebuyers only.
In the year of 2016, a new set of laws as RERA Act have been implemented, specifically to protect the homebuyer and ensure the growth of real estate sector.
If any company is not making the payment as per agreed terms, then an insolvency petition may be filed u/s 7 or 9 based upon the facts, before NCLT to initiate the insolvency proceedings.
Insolvency is just the state where the financial inability is reached whereas the bankruptcy is the realization and announcement of that the state of being insolvent.
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.
IBC and RERA Act, enacted in 2016, appear to be pitted against each other as far as protecting the interests of bankers and home buyers are concerned.
Cheers to NCLT’s efforts for effectively complying with IBC and be able to resolve eigth high profile insolvancy cases within a year.
article we will discuss about Compulsory and Voluntary Liquidation and how it is helpful for the Corporate Creditor against their debtor/s.