The supreme court on August 9 upheld the the constitutional validity of amendment in Insolvency and Bankruptcy code and confers the status of homebuyers as financial creditors. Justice Rohinton Fali Narinman dismissed the plea of 200 real estate companies who challenged the constitutionality of amendment of IBC and stated that the Insolvency and Bankruptcy Code gives an additional forum to homebuyers to raise their grievances. It was also held that RERA Act and IBC will work harmoniously and in case of dispute IBC will prevail.
The key points of the judgement is as follows:
- RERA and IBC to read harmoniously and in case of conflict IBC will prevail.
- 5(8)(f) includes Homebuyers as Financial Creditor.
- RERA Authority to be appointed within three months
- Union has to fille the affidavit stating about how they are doing about manning NCLT and NCLAT.
The landmark judgement gave a huge win to the homebuyers and a sigh of relief by providing them the status of Financial Creditors.
Click here to read full judgement: Writ Petition (Civil) 43_2019 (09-08-2019)