Update IBC code for builders to give data of all buyers: Parl panel

11 Aug 2021 CW Team

If a single home buyer decides to file for the builder's bankruptcy resolution in the NCLT, a parliamentary panel has recommended that the government include a provision in the Insolvency Bankruptcy Code (IBC) requiring builders to provide details of all customers in a project.

A minimum of 100 homebuyers or 10% of total purchasers, whichever is fewer, is required to start the insolvency process, according to a 2018 amendment to the IBC.

The Forum for People's Collective Efforts (FPCE), which helped pass the Real Estate Regulatory Authority law (RERA), explained to the Parliamentary Standing Committee on Finance how this provision is ineffective and disadvantages homebuyers when compared to builders.

Homebuyers are having practical difficulties gathering the required number of purchasers to initiate insolvency proceedings against the real estate owner, according to the panel, which studied the pitfalls in the implementation of the IBC.

According to the panel's report, which was presented to Parliament last week as a result, the committee recommends that once a single homebuyer decides to file for bankruptcy in NCLT, the real estate owner should be required by the Rules and Guidelines to provide the homebuyer with information about other homebuyers in the project so that the required 10% or 100 homebuyers can be mobilised, ensuring that homebuyers' interests are protected.

Abhay Upadhyay, a member of the RERA Central Advisory Council, and the national convener of the FPCE said that they expect the government to find a solution to the problem.

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Also read: Govt launches bill in Lok Sabha to amend insolvency law

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