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The national lobby of home-buyers, the Forum for People’s Collective Efforts (FPCE), has written to Prime Minister Narendra Modi suggesting that there be no amendment to the existing Insolvency and Bankruptcy Code (IBC).
Incidentally, there are plans to bring in the Insolvency and Bankruptcy Code (IBC) Amendment Bill during the ongoing Winter Session of the Parliament. The Bill will seek to raise the number of home-buyers who can invoke insolvency proceedings against realty developer and also introduce individual insolvency and cross-border insolvency regimes.
According to Abhay Updadhyay, President of the Forum, the Supreme Court judgement has expressly clarified that RERA and IBC will co-exist. Once that is done, any demand to amend the law (IBC in this case) should not be entertained.
Having failed legally, these builders are now mounting pressure on the government to amend the IBC to suit their interest by either completely barring home-buyers from approaching the National Company Law Tribunal (NCLT) or insert the requirement of a minimum threshold of number of home-buyers who need to come together. This suggestion of builders is not only illogical, illegal but also regressive to say the least, he said.
“An accused developer can’t be allowed to decide in which court they should be dragged by his victim just to suit his comfort. He also can’t be allowed to dictate dilution in law so that he can breathe easy and it becomes difficult for his victim to make good of his loss,” Upadhyay said in the letter written to the Prime Minister Narendra Modi.
Upadhyay and the forum in their letter mentioned that under the IBC, a single creditor (operational/financial) whose due is ₹1 lakh or more can drag a corporate entity to the NCLT. But for the home-buyers, the financial stake is much more than that.
A copy of the letter has been sent to the Union Finance Minister Nirmala Sitharaman; Secretary of the Ministry of Corporate Affairs, and the Chairman of the Insolvency and Bankruptcy Board of India.
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