In what could be a big relief for home buyers, President Ram Nath Kovind on Wednesday gave his nod to promulgate the Insolvency and Bankruptcy Code (Amendment) Ordinance.
"The President today gave assent to promulgate the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018," according to an official statement.
Once propagated, the Insolvency and Bankruptcy Code (IBC) will recognise home buyers as financial creditors giving them due representation in the Committee of Creditors (CoC).
The home buyers would now have a share in the proceeds earned by the sale of assets of bankrupt real estate companies. This would make them an integral part of the decision-making process, the government said.
Home buyers will be recognised as financial creditors now&will be a part of decision making process. Their voting share will increase as per their exposure& their bargaining power will increase:Secy, Ministry of Corp Affairs on Insolvency&Bankruptcy Code (Amendment Ordinance,2018 pic.twitter.com/ZJG8Byx1Y0— ANI (@ANI) June 6, 2018
Besides these, home buyers would now be able to invoke Section 7 of the IBC against errant developers. Section 7 allows financial creditors to file an application seeking insolvency resolution process.
The decision has been taken at a time when many home buyers are facing hardships on account of delayed and incomplete real estate projects.
(With inputs from agencies)