IBBI Amends Liquidation Process, Benefits Home Buyers
Real Estate

IBBI Amends Liquidation Process, Benefits Home Buyers

In a significant move aimed at enhancing transparency and stakeholder-centricity in the liquidation process, the Insolvency and Bankruptcy Board of India (IBBI) has introduced crucial changes. These amendments not only provide relief for specific home buyers but also grant a pivotal role to the Stakeholder Consultation Committee (SCC) comprised of creditors of the company under liquidation.

The recent adjustments made by IBBI are anticipated to instill confidence among stakeholders involved in the liquidation process. Particularly noteworthy is the protection now afforded to home buyers with allotted and possessed housing units in stalled projects. These units are shielded from inclusion in the "liquidation estate" of such projects, ensuring that liquidators are barred from selling these properties as part of the liquidation process.

Hari Hara Mishra, CEO of the Association of ARCs in India, hailed the exemption of allotted housing under possession from the liquidation estate as a significant relief for home buyers.

Under the latest amendments, creditors of a company in liquidation find themselves in the driver's seat. The SCC now wields meaningful influence on critical operational matters, including the early dissolution of the corporate debtor, private sale of assets, and the sale of the debtor as a going concern. This marks a departure from the previous scenario where liquidators held unilateral decision-making powers.

Anjali Jain, Partner at Areness, noted that the discretionary powers of liquidators have been curtailed, introducing checks and balances into the liquidation process. This includes decision-making regarding schemes of compromise or arrangement, auctions, litigation, and valuation mechanisms.

Padmaja Kaul, Partner at IndusLaw, emphasized that the amendments signify a crucial step towards enhanced accountability and transparency by bolstering the participation of the SCC. This move ensures that stakeholders' interests are prioritized through meaningful consultations before pivotal decisions are made.

Misha, Partner at Shardul Amarchand Mangaldas & Co, highlighted the increased role of the consultation committee, which now plays a part in critical areas of the liquidator's functioning. Mishra echoed this sentiment, stating that involving the consultation committee reinforces commercial wisdom and a committee-based approach in decision-making.

Jain further added that the requirement for SCC approvals for litigations or other liquidation costs, coupled with cost-benefit analyses, promises to bring efficiency in terms of timelines and value addition.

The amendments to the liquidation process regulations herald a new era of accountability, transparency, and stakeholder involvement, marking a significant stride towards a more robust insolvency framework in India.

In a significant move aimed at enhancing transparency and stakeholder-centricity in the liquidation process, the Insolvency and Bankruptcy Board of India (IBBI) has introduced crucial changes. These amendments not only provide relief for specific home buyers but also grant a pivotal role to the Stakeholder Consultation Committee (SCC) comprised of creditors of the company under liquidation. The recent adjustments made by IBBI are anticipated to instill confidence among stakeholders involved in the liquidation process. Particularly noteworthy is the protection now afforded to home buyers with allotted and possessed housing units in stalled projects. These units are shielded from inclusion in the liquidation estate of such projects, ensuring that liquidators are barred from selling these properties as part of the liquidation process. Hari Hara Mishra, CEO of the Association of ARCs in India, hailed the exemption of allotted housing under possession from the liquidation estate as a significant relief for home buyers. Under the latest amendments, creditors of a company in liquidation find themselves in the driver's seat. The SCC now wields meaningful influence on critical operational matters, including the early dissolution of the corporate debtor, private sale of assets, and the sale of the debtor as a going concern. This marks a departure from the previous scenario where liquidators held unilateral decision-making powers. Anjali Jain, Partner at Areness, noted that the discretionary powers of liquidators have been curtailed, introducing checks and balances into the liquidation process. This includes decision-making regarding schemes of compromise or arrangement, auctions, litigation, and valuation mechanisms. Padmaja Kaul, Partner at IndusLaw, emphasized that the amendments signify a crucial step towards enhanced accountability and transparency by bolstering the participation of the SCC. This move ensures that stakeholders' interests are prioritized through meaningful consultations before pivotal decisions are made. Misha, Partner at Shardul Amarchand Mangaldas & Co, highlighted the increased role of the consultation committee, which now plays a part in critical areas of the liquidator's functioning. Mishra echoed this sentiment, stating that involving the consultation committee reinforces commercial wisdom and a committee-based approach in decision-making. Jain further added that the requirement for SCC approvals for litigations or other liquidation costs, coupled with cost-benefit analyses, promises to bring efficiency in terms of timelines and value addition. The amendments to the liquidation process regulations herald a new era of accountability, transparency, and stakeholder involvement, marking a significant stride towards a more robust insolvency framework in India.

Next Story
Real Estate

Dharavi Rising

Dharavi, Asia’s largest informal settlement, stands on the cusp of a historic transformation. With an ambitious urban renewal project finally taking shape, millions of residents are looking ahead with hope. But delivering a project of this scale brings immense challenges – from land acquisition to rehabilitate ineligible residents outside Dharavi and rehabilitation to infrastructure development. It also requires balancing commercial goals with deep-rooted social impact. At the helm is SVR Srinivas, IAS, CEO & Officer on Special Duty, Dharavi Redevelopment Project (DRP), Government..

Next Story
Real Estate

MLDL Records 20.4% Growth in Pre-Sales

Mahindra Lifespace Developers Limited (MLDL), the real estate and infrastructure development arm of the Mahindra Group, announced its financial results for the quarter ended March 31, 2025. In line with INDAS 115, the company recognises revenues using the completion of contract method. Key highlights FY25: Consolidated sales (Residential and IC&IC) of Rs 32.99 billion. Gross development value (GDV) additions in FY25 were Rs 1.81 trillion compared to Rs 440 billion in FY24 (~4x growth). Residential pre-sales of Rs 28.04 billion in FY25, reflecting 20.4% growth o..

Next Story
Infrastructure Transport

UCSL Delivers India's First Green Cargo Vessel to Norway

In a landmark achievement for Indian shipbuilding and the Atma Nirbhar Bharat initiative, Udupi Cochin Shipyard Limited (UCSL), a subsidiary of Cochin Shipyard Limited (CSL), has delivered the first of six next-generation green cargo vessels to Norway-based Wilson Ship Management AS, Europe’s largest short-sea shipping operator. The 3,800 DWT vessel, named Wilson Eco 1, was handed over during a ceremony at New Mangalore Port. The delivery is part of a Rs 5.06 billion project supported by Norway’s green maritime funding programme, marking India's entry into the European eco-friendly ca..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?