Summary: Recent judicial developments in India are reshaping the treatment of homebuyers under the Insolvency and Bankruptcy Code, 2016. Courts have moved beyond merely recognising homebuyers as financial creditors to substantively distinguishing genuine homebuyers from speculative investors, ensuring the Code is not misused as a recovery tool. While admission into insolvency remains a narrow enquiry of debt and default, broader homebuyer protection is addressed within the resolution process through prospective directions, equitable exceptions for belated claims, and judicial intervention against third-party actions that threaten project viability Alongside, consumer protection remedies under RERA and the Consumer Protection Act continue to offer parallel avenues for redressal. The evolving framework seeks to balance procedural discipline with fairness, ensuring genuine homebuyers are not left without effective remedies.
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Supreme Court Gives Insolvency Claims a Fresh Lease of Life: Debt Restructuring and Substantive Compliance
Summary: The recent decision of the Supreme Court in B. Prashanth Hegde v. State Bank of India recognises that an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”), that substantially complies with the requirements cannot be rejected merely due to insignificant errors or omissions. Further, debt restructuring can amount to acknowledgement of debt by the Corporate Debtor, extending the limitation period for filing such an application.
Continue Reading Supreme Court Gives Insolvency Claims a Fresh Lease of Life: Debt Restructuring and Substantive Compliance