Swift action by NDA Govt: A breather for Home-buyers
(9 months ago)
By Gaurav Gaur, New Delhi , Aug.17 : Within a week of the admission of the Insolvency petition by the NCLT (National Company Law Tribunal), against Jaypee Infratech limited, the Government of India, Along with IBBI (Insolvency and Bankruptcy Board of India) have proved their resolve in making IBC 2016 (The Insolvency and Bankruptcy Code) an effective, efficacious and equitable remedy, taking care of interests of all the creditors involved.
In a major relief to the home-buyers of not only Jaypee Infratech Limited but also of other innumerable realty projects in default, the IBBI(Insolvency and Bankruptcy Board of India) in exercise of the powers conferred upon it under IBC 2016 has amended the Insolvency Resolution Process for Corporate Persons Regulations 2016.
Regulations have been amended and a new Form-F has been introduced. It duly recognises another category of Individual Creditors in addition to Financial Creditors and Operational Creditors.
It shall be pertinent to note that much confusion and chaos was caused when, worried and hassled home-buyers of Jaypee Infratech Limited were unsure of the mode of preferring their claims with the Interim Resolution Professional(IRP) appointed in the matter.
As the IBC Code 2106 before the amendment of Regulations (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2017 notified on 16.08.2017) provided for filing of claims only by Financial Creditors and Operational Creditors, however with the introduction of Form-F a mode has now been prescribed to the worried home-buyers to submit their claims and heave a sigh of relief.
The Government of India and IBBI have shown grit and resolve in addressing the concerns of the home-buyers while acting with alacrity and it goes a long way in restoring confidence of all the stakeholders.
It may be remembered that the intent behind enactment of the IBC code 2016 was to reorganise and provide insolvency resolution for corporate entities and partnerships in a time bound manner.
The code would have been deficient had provisions not been made in a timely manner to address the concerns of all the stakeholders. The present amendments make IBC 2016 a potent mechanism.
IBC 2016 aims to provide effective resolution to the claims raised by creditors against defaulting corporate debtors, the intent is to keep the corporate entity running while devising resolution plans by the Resolution Professional in conjunction with the resolution applicant or creditors.
Resolution Professionals have to work with in strict time frame and come up with a resolution plan, while tasked with keeping the corporate entity running as a going concern, taking over management, keeping effective control over the assets and balancing various other interests and undertaking innumerable activities, which shall be in addition to processing of claims of creditors and negotiating with them.
With the amendments being notified the 30000 odd homebuyers can now be rest assured that pursuant to complying with the regulatory formalities their claims shall be accounted for and their concerns duly addressed by the IRP. However, the challenge that remains to be countered by IRP's is the collation, verification and processing of such a deluge of claims, with in the stipulated period of 180 days along with one time extension of 90 days if so availed. I am sure that IBBI must surely be working on augmenting the framework for IRP's to undertake this task. Mr. Gaurav Gaur is an advocate and insolvency professional. The views expressed in this article are personal.