Dismantling The 'Creditor-In-Control' Orthodoxy: A Blueprint For An Integrated RERA-IBC Project-Management Model
- IJLLR Journal
- Feb 17
- 1 min read
Aryaman Tripathi, NALSAR University of Law
ABSTRACT
The article examines the discrepancies between India’s Insolvency and Bankruptcy Code (IBC), 2016, and the Real Estate (Regulation and Development) Act (RERA), 2016, concerning financially distressed real estate projects. It argues that the difference- IBC’s focus on corporations and RERA’s consumer-protection goals results in poor resolutions. Homebuyers are recognised as & quot;financial creditors," yet they hold little real power.
The research uses a mixed-methods approach. It merges a review of quantitative case filing and recovery data with qualitative case studies to provide insights from homebuyers’ perspectives. The analysis outlines a non-linear path of reform, beginning with the notable Jaypee Infratech case that acknowledged homebuyers as financial creditors. It follows the legislative amendments in 2018 and 2020 and explores judicial innovations like "Reverse CIRP" and "Project-wise Resolution." The article highlights ongoing problems, such as information gaps, barriers to homebuyer participation, and low recovery rates for creditors, particularly in liquidation.
It advocates for a practical model that leverages the strengths of both laws. This would involve redefining the role of the Resolution Professional (RP) to focus only on corporate restructuring. It also suggests creating a dedicated project management team to manage daily operations and financial issues. The paper concludes by discussing the 2025 CIRP amendments. These amendments support this vision by introducing rules for handing over possession, involving facilitators, and allowing relevant authorities in CoC meetings. This signals a challenging but ongoing effort to build a more effective framework.
