Amendments to the Insolvency and Bankruptcy Code (IBC) cleared by the Cabinet yesterday on 23rd May 2018, moreover, the government-appointed panel suggested incorporating changes.
At the present, when a realty company becomes insolvent and the builders get bankrupt, the rightful keeper for the auction money is the bank, but now as the Cabinet cleared that, home buyers should be treated as financial creditors as well, it seems that justice has been served for the home buyers.
According to the panel, in an insolvency resolution process, home buyers should be treated as financial creditors, which will permit them to equitably and rightfully participate.
“I cannot disclose anything because it’s a new legislation except to reinforce that the Cabinet has approved it”, while briefing reporters after the Cabinet meet, minister for Law and Justice Ravi Shankar Prasad said.
“There is something called constitutional protocol. An Ordinance till it is approved by the President, I cannot speak about the details” Mr. Prasad added when asked if the Cabinet has cleared some relief measures for home buyers as per the recommendations of the panel.
There were some suggestions regarding addressing woes of home buyers and making recoveries easier for lenders by a 14-member Insolvency Law Committee to the Ministry of Corporate Affairs.
Under the IBC, the panel has also suggested relaxations for Micro, Small and Medium Enterprises (MSMEs).