Relief For Home Buyers As Insolvency Board Amends Bankruptcy Resolution Process Norms

In another move to ensure and safeguard the interest of various stakeholders, including home buyers, the Insolvency and Bankruptcy Board has amended the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 mandating that the resolution plan for a company has to explicitly state how it has dealt with the interest of all stakeholders.

The Board had earlier issued Form F, using which the house owners could raise their claims before the Insolvency Professional. The recent amendment is also being seen as a way to further Supreme Court’s directions to protect the interests of distressing home buyers who have been illegally deprived of their right to own houses/flats by real estate builders.

The official release said that, “A resolution plan shall include a statement as to how it has dealt with the interests of all stakeholders, including financial creditors and operational creditors, of the corporate debtor”. The revised rules will ensure that banks and other creditors do not get away by protecting their own interests at the expense of others who are also impacted by the action.