Supreme court has provided partial relief to homebuyers. The said amendment shall come into effect only after hearing the government and the homebuyers. Supreme court has issued notice to government of India on the petition filed by homebuyers against the amendment of the Insolvency and Bankruptcy Code (IBC) 2016 . This amendment included a minimum threshold for filing an application with the Hon’ble National Company Law Tribunal against a defaulting developer.
“This basically means that the NCLT will have to maintain status quo with respect to the applications already filed by homebuyers and investors against defaulting developers,” said Aditya Parolia of PSP Legal, Advocates & Solicitors. The government recently amended the Insolvency and Bankruptcy Code (IBC) 2016 through an ordinance introducing a threshold of minimum 100 or 10%of allottees in a project or class of investors required that can approach the NCLT in order to start the liquidation process against the defaulting developer.
The apex court also intimated that until further hearing , NCLT shall not reject the applications of the home buyers or investors for non-compliance of the new amendment brought in by the government introducing a minimum threshold for filing application under the Insolvency and Bankruptcy Code (2016). Compliance with the amendment for the existing applications shall be made within 30 days of passing the ordinance.“However, there is no clarity on the threshold limit as of now as the bench didn’t comment on the same,” said Parolia. Homebuyers are against the amendment and feel that it is discriminatory in nature.Prior to this amendment even a single financial creditor, including a homebuyer, with claims of at least ₹1 lakh could move NCLT against the defaulting developer.
“The Supreme Court has granted a partial stay on the 3rd provison of Section 3 today and issued a notice to the Union of India. This means that all the petitions that were filed before the amendment shall not be bound by the 30 day period given to satisfy the amendment.,” said Advocate Srijan Sinha, a lawyer practicing in the Supreme Court.