Homebuyers’ interest groups are keen that the government should not bring in changes in the IBC Act that could change the recent judgement of the Supreme Court that allowed for even a single aggrieved homebuyer to approach the National Company Law Tribunal against a builder.
The realty sector is witnessing a lot of changes. For years the builders have been taking their money and delaying on completing the projects and handing over the built homes to the buyers. Then came RERA and some stringent provisions to curb such practices. But the builder lobby is quite powerful and have been finding ways of escaping the law.
The question arose if the person who has paid the cost of a house to the builder be designated as a financial creditor if the builder company goes insolvent for any reason. This question was settled by the Supreme Court which said payment to the builder in advance covering the cost of the house makes the home buyer a financial creditor. Then if the IBC allows for even a single creditor in the case of a company to approach the NCLT, there is no need to distinguish the real estate sector from the same set of rules.
According to a FinancialExpress report, the Forum for People’s Collective Efforts (FPCE) the body that fights for the rights of the homebuyers across the country has now got wind of a development that the government is mulling an amendment to the IBC Act by which in the case of real estate there has to be a minimum of 100 investors to be eligible to haul a defaulting builder to the NCLT.
The FPCE has therefore addressed a letter directly to the Prime Minister not to go ahead with such a move. They feel the builder lobby is trying to push for this amendment since they have failed to stop it legally and the Supreme Court has ruled in favour of the homebuyers. This letter is dated November 18.