Key Points
The government is having a rethink of its plan to put in place a special framework for real estate under which insolvency proceedings would be restricted to only individual stressed housing projects and won't extend to their developers, a person aware of the details told ET...
This means promoters of realty firms are unlikely to get greater protection from insolvency under fresh amendments to the bankruptcy law that are being worked out, he said...
The rethink was warranted by fears that unscrupulous promoters may use any such relief to dump certain housing projects midway after grabbing profits and focus on those that, they think, will fetch greater returns, the person said..
Homebuyers and 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, subject to certain riders...
As per the deliberations by the ministry of corporate affairs (MCA) for finalising amendments to the IBC, insolvency proceedings could continue to be invoked against the entire real estate firm, the person said...
