In order to be a member of the committee of creditors, it is necessary for a home buyer to file claims before the insolvency professional.
The amendment gave a voice to home buyers in the CoC through the appointment of insolvency professional (IP) who takes care of their interests. However, the IP representing home buyers does not have the right to cast vote on their behalf. In order to be a member of the CoC, it is necessary for a home buyer to file claims before the IP. For home buyers to be recognised as financial creditors, their claims have to be verified and admitted by the IP.
The challenge faced by resolution professionals in companies undergoing insolvency proceeding is that many home buyers have not filed their claims.
“Unless a home buyer files his claim and it is admitted by the IP, he will not be treated as the financial creditor and his vote will not count in the CoC when a decision on any relevant issue is required to be taken,” says Alok Dhir, managing partner, Dhir & Dhir Associates.
Some legal experts feel that there are contradictions within the circular issued by the regulator, the Insolvency and Bankruptcy Board of India (IBBI). The amendments state that all financial creditors who file claim and who are creditors in books of the company should be made members of CoC. But the circular says only those creditors who file claims will have voting share and only their voting will be counted, points out a legal expert. “This is a contradiction. If a claim of a creditor is admitted in books then how can it be ignored and creditor not included in CoC and voting share not assigned,” asks another lawyer who closely tracks IBC proceedings.
Dhir, however, feels that there is no confusion over voting rights of home buyers. “A proper procedure has been formulated in the IBC and regulations framed thereunder in order to regulate the voting by home buyers,” he says.
Till the time the regulator clears the air, confusion is expected to prevail over voting rights of home buyers under IBC.
Source: Business Standard , September 19 ‘ 2018.