Evaluative Study On The Impact Of Real Estate Insolvencies On Homebuyers Rights And Creditors
- IJLLR Journal
- Jun 9
- 1 min read
Sreelakshmi P R, LL.M., Amity Law School, Amity University, Bengaluru.
Jyotirmoy Bannerjee, Assistant Professor, Amity Law School, Amity University, Bengaluru.
ABSTRACT
The real estate sector has witnessed a surge in insolvency proceedings, significantly impacting both homebuyers and creditors. This research paper presents an evaluative study on the effects of real estate insolvencies within the framework of the IBC, 2016, with a particular focus on the evolving rights of homebuyers and the balancing of creditors' interests. The inclusion of homebuyers as financial creditors through the 2018 amendment marked a pivotal shift in the IBC's application to real estate. This study critically examines key judgments by the NCLT and NCLAT, alongside legislative reforms, to assess their implications on the resolution process. It analyses whether the IBC has successfully protected homebuyers’ investments while maintaining the interests of secured creditors. The research further explores challenges such as delays in project completion, misuse of insolvency proceedings, and the conflict between different classes of creditors. By assessing the legal and practical dimensions of these issues, the study offers insights into the effectiveness of the IBC in addressing real estate insolvencies and proposes recommendations to enhance its implementation for equitable stakeholder protection. The study further explores the challenges in implementing the IBC in real estate cases, including delays, lack of resolution plans, and developer insolvencies. By analysing legislative developments and landmark case laws, the paper provides a comprehensive understanding of the evolving dynamics between homebuyers and creditors, ultimately suggesting policy measures to ensure equitable protection and efficient resolution in real estate insolvencies.
Keywords: Real Estate Insolvency, Homebuyers’ Rights, Financial Creditors, RERA.
