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Informist, Tuesday, Feb. 4, 2025

 

NEW DELHI – The resolution professionals of real estate companies can now hand over possession of plots, apartments, or buildings to the homebuyers while the resolution process is still under way, after obtaining approval of the committee of creditors and upon fulfilment of all obligations by the homebuyer. Thus, distressed homebuyers would not have to wait for long to get possession of their properties.

 

This was one of the latest set of amendments notified by the Insolvency and Bankruptcy Board of India on Monday. Further, the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2025, which comes into effect immediately, seeks to further streamline the corporate insolvency resolution process with a special focus on real estate projects.

 

The amendments state that facilitators can now be appointed for sub-classes within large creditor classes such as homebuyers to ensure their effective participation in the insolvency resolution process of a real estate company. Facilitator's role includes facilitating communication between the authorised representative and the creditors assigned to him and providing information and clarifications to the creditors about the insolvency resolution process. 

 

In addition, the committee of creditors of a real estate company can now invite relevant land authorities such as New Okhla Industrial Development Authority and Haryana Urban Development Authority to their meetings for inputs and perspectives on regulatory and land development related matters, said the amendments. Participation of land authorities would not only enhance the viability and feasibility of resolution plans but also build confidence among homebuyers and other stakeholders in the resolution process, said the insolvency board.

 

The amendment states that resolution professionals must now prepare a detailed report on the status of development rights, approvals, and permissions for real estate projects within 60 days of insolvency commencement. This will provide clarity on project viability, thereby helping creditors make informed decisions in a timely manner, said the insolvency board.

 

Further, the committee of creditors of real estate companies has now been empowered to relax certain conditions for associations or groups of homebuyers to participate as resolution applicants in the insolvency resolution process, said the amendments. These include relaxations in eligibility criteria, performance security and deposits for submitting resolution plans. 

 

The amendments stated that the committee of creditors must now consider forming a monitoring committee to monitor and supervise the implementation of the resolution plan. The committee, which may comprise the resolution professional and representatives of creditors and the successful resolution applicant, must submit quarterly progress reports to the national company law tribunal. The proposal aims to enforce accountability and ensure timely execution of approved plans, said the board.

 

The resolution professionals are now required to disclose the corporate debtor's registration status as a micro, small, or medium enterprise, said the amendments. This will encourage greater participation of potential resolution applicants as they can avail benefits and relaxations available for micro, small, or medium enterprises under the Insolvency and Bankruptcy code, 2016, said the board.  End

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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