Pankaj Bajaj Eldeco: Change in IBC Rule Aims at Protection of Home Buyers

The government is learning the Insolvency and Bankruptcy Code on a ?comprehensive basis? to amend the law to supply relief to thousands of homebuyers stuck in returns wherever builders are claiming financial condition.

The idea clearly is to supply relief however the relief has got to return not through government action. It?s to be provided for within the system of rules,

Pankaj Bajaj Eldeco, President, CREDAI NCR claims:
?It is a good move for the protection of the money of homebuyers. RERA protects the money of buyers in an ongoing concern. Now the buyer?s investment is protected even in the case of insolvency. This will instill a sense of confidence amongst buyers of under construction property. However, for a continued flow of institutional and bank credit to the real estate sector, the system must uphold the superiority of a bank mortgage over any other claim otherwise banks may become hesitant in lending to this sector.?

Legal specialists say there are 2 choices before it ? amend the bankruptcy law to confirm that patrons get their due and not lose bent banks and money establishments once a defaulting builder?s properties are liquidated and debts are settled or to alter the law?s operational rules to form homebuyers trustees in order that their investments are compulsorily protected.

The Jaypee Infratech case involving nearly 40,000 homebuyers was a different case as a result of alternative firms that were obsessed beneath the Insolvency and Bankruptcy Code were business-to-business corporations which are similar to steel and power firms, however, Jaypee Infratech concerned thousands of homebuyers.

The problems of house owners are renowned. They are noted by the state government; the province CM has already issued directions to the builders and these issues are noted to the Finance Minister; they're noted right across the government.

The government plans to induce the amendments supporting the report?s recommendations lapsed in Parliament within the current session.

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