Supreme Court of India has settled the law in RERA versus NCLT,  that homebuyer’s rights are at par with lenders making them financial creditors.

Insolvency Proceedings against Builder in NCLT Chandigarh
Insolvency Proceedings against Builder in NCLT Chandigarh

The law is clear in case the builder/real estate developer defaults in his payment, consumer can take the builder to either

  1. RERA Punjab/RERA Panchkula
  2. NCLT Chandigarh (if the registered office is there)

What does the homebuyer need to prove?

That the builder had defaulted in his obligation and the debt is recoverable now through bankruptcy court.

Once that is established, now the onus is on the builder to private that the consumer does not wish to take the possession of the house.

Now the government is thinking of creating a minimum threshold on the numbers of homebuyers trying to invoke the Insolvency Banking Code, 2016 (IBC). As per reports, it should be 5% or one-fifth of the total homebuyers pressing for the relief before NCLT, Chandigarh.

This is happening that speculative investors are trying to pressurize well run real estate companies before bankruptcy court therefore abusing the insolvency proceedings. This would further deter the timely delivery of units in the project. Therefore, interest if a few individuals should not impact the entire project.

Companies facing insolvency proceedings now even have to Shane the claims of genuine homebuyers who wish to invoke the bankruptcy code as their rights are in consonance with other financial creditors. But one must choose one forum for the resolution of disputes as otherwise it would lead to multiplicity of proceedings which should be avoided at all costs.

For case specific advice one can contact either NCLT Chandigarh top/expert lawyer or RERA Punjab/RERA Panchkula advocate.

Rest for more information, feel free to dial 9988817966.