Key Points
NEW DELHI: A planned special resolution framework for real estate for effectively granting greater protection to defaulting firms from bankruptcy proceedings is unlikely to feature in the amendments to the Insolvency and Bankruptcy Code (IBC) that the government is firming up, people familiar with the development said...
After extensive deliberations, the government now reckons that such sector-specific mechanisms within the IBC could dilute the very essence of the bankruptcy law and prove to be counter-productive, they told ET..
In January 2023, the government had sought stakeholders' views on the special insolvency regime for real estate under which the adjudicating authority could, at its discretion, apply the IBC provisions only to insolvent projects, instead of subjecting the entire realty company to bankruptcy proceedings...
"After due deliberations and consultations, no special framework for real estate is being planned now," said one of the persons quoted above...
Homebuyers beyond a certain number, in addition to other creditors, are empowered to drag the entire realty firm to the National Company Law Tribunal (NCLT) even for insolvency in one of its projects...
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