Homebuyers As Financial Creditors And The Resulting Delays In Cirp Due To Information Asymmetry
- IJLLR Journal
- 2 hours ago
- 2 min read
Surbhi Sachdeva, Amity Law School, Noida
ABSTRACT
The recognition of homebuyers as financial creditors under the Insolvency and Bankruptcy Code, 2016, marked a significant shift in how Indian insolvency law treats a traditionally vulnerable class of stakeholders. Yet this formal inclusion has not resolved the deeper tensions that arise when dispersed, often legally uninformed allottees interact with a framework built around strict timelines and procedural finality. This chapter examines one such tension, the problem of belated claims and argues that it constitutes a structural bottleneck rather than a mere procedural inconvenience.
The chapter traces the legislative and judicial evolution of homebuyers' standing under the Code, from early uncertainty through the 2018 amendment and subsequent Supreme Court validation, before turning to the practical realities that undermine their effective participation. Chief among these is information asymmetry: homebuyers are frequently unaware that a Corporate Resolution Insolvency Process has commenced, and public announcement mechanisms remain ill-suited to reaching a geographically scattered creditor class. The result is a recurring pattern of late filings that strain the resolution process, disrupt Committee of Creditors deliberations, and create uncertainty for resolution applicants.
The chapter critically examines the judicial response to this tension. While courts have invoked equity to accommodate belated claims, notably through an expansive reading of the Resolution Professional's obligations, such interventions carry their own costs, often reopening settled stages of the CIRP and undermining the clean slate principle articulated by the Supreme Court in Ghanshyam Mishra. Drawing on recent NCLAT decisions and the IBBI's April 2026 Committee Report, the chapter concludes that the solution lies not in relaxing procedural timelines but in addressing the informational deficits upstream, through strengthened Resolution Professional duties, modernised public announcement methods, RERA coordination, and a more robust role for Information Utilities.
Keywords: Financial Creditor, Insolvency and Bankruptcy Code, 2016, Homebuyers, Belated Claims, Information Asymmetry.
