New Delhi: The appeal of the realty players to amend the provisions of the Insolvency and Bankruptcy Code (IBC) so as to have consent of a certain percentage of homebuyers to start insolvency proceeding against them has been vehemently opposed by house buyers. In a fresh letter written by them to the Prime Minister Narendra Modi, the homebuyers have urged the government not to pay heed to such demand of real estate companies and let there be status quo on the current rules and regulations.
In letter to the PM dated 18th November, the Abhay Upadhyay, President- Forum for People’s Collective Efforts (FPCE), has written “There is no such precedence anywhere in the world where law makers amend the legislation by listening to such stakeholder who are accused under that law. Rather it should be vice-versa where legislations should amend the law to ensure speedy and fair justice by listening to the victims who have suffered”.
The efforts of the builders to amend the current law and put in place provisions for requirement of a threshold of a number of homebuyers who must come together for approaching the National Company Law Tribunal (NCLT) for initiating insolvency proceedings against a builder has been termed as “Illegal” and “Illogical” by FPCE.
FPCE has alleged that the reason for such demands by builders is that they still want to swindle homebuyers money and not hand over properties to the buyers for which they have taken payment from them.
An accused developer can’t be allowed to decide in which court they should be dragged by his victim just to suit his comfort. He also can’t be allowed to dictate dilution in law so that he can breathe easy and it becomes difficult for his victim to make good his loss.
“An accused developer can’t be allowed to decide in which court they should be dragged by his victim just to suit his comfort. He also can’t be allowed to dictate dilution in law so that he can breathe easy and it becomes difficult for his victim to make good his loss,” FPCE has further said in the letter.
“It is absurd to demand that the accused should not be dragged to a court of law till his victim finds other victims and joins hands to become eligible to approach a court of law. It is akin to saying that no one should approach a police station against a person who is guilty of murder till he finds other victims of murder by the accused and joins hands,” the letter says.
Upadhyaya has said that if there is any attempt to dilute the rights of a homebuyer under IBC will send out a wrong message and even derail the entire process of reforming the realty sector.
In 2016, IBC was formulated by the Modi Government to help a financial creditor of a company move the NCLT to start insolvency proceedings against a company if the company is not paying back the amount it owes to the financial creditor.
More recently, homebuyers have been accorded the status of financial creditor who can move the NCLT against the builder to initiate insolvency proceedings against them.
The homebuyers have filed more than 1,800 cases against real estate companies in the country since June 2018, according to the government. In many cases, insolvency proceedings have been ordered by NCLT against builders even when one homebuyer approached it with his or her complaint.
However, now the builders have been demanding that there should be a minimum number of buyers of a real estate project who can approach NCLT together against a realty firm.