The Supreme Court in one of its landmark judgment has upheld the status of ‘Financial Creditors’ accorded to home buyers by the 2018 amendment made to the Insolvency and Bankruptcy Code, 2016. The decision was pronounced in a case filed to challenge the constitutional validity of the said amendment by a group of around 136 builders by way of writ petitions which were linked with a petition filed by Pioneer Urban Land and Infrastructure against home buyers. The Court stated that the status accorded to the home buyers will give them the right to approach National Company Law Tribunal against a defaulting builder company as its financial creditors. Moreover, it stated that this right shall be exercised in harmony with the rights given to home buyers to seek remedy under Real Estate Regulatory Act (RERA) and Consumer Protection Act.
However, this judgment has given rise to a lot of questions among the home buyers, such as, what is the benefit of this status given to the homebuyers? How can the right to approach National Company Law Tribunal help aggrieved homebuyers? Will it reduce the time spent on litigation? Can a homebuyer file a case in NCLT along with the ones already instituted under RERA and Consumer Protection Act?
Watch this video to know the answers to all these questions!
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