Homebuyers' body writes to PM Modi to stop proposed IBC amendment

Topics Real Estate  | homebuyers

Representative Image.

Homebuyers' body FPCE has written to Prime Minister Narendra Modi to intervene and stop any proposed amendments in the Insolvency and Bankruptcy Code (IBC) to dilute rights of flat owners, who have been declared as financial creditors under the law.

With individual homebuyers taking builders to bankruptcy court, rattled real-estate developers from Delhi-NCR are demanding that all consumer complaints first be heard by regulator RERA before insolvency proceedings are initiated.

Forum for People's Collective Efforts (FPCE) President Abhay Upadhyay has written a letter to the Prime Minister, appealing him to intervene and "stop the proposed amendment to the Insolvency and Bankruptcy Code (IBC) being demanded by builders".

He alleged that real estate developers are making every attempt to thwart all steps taken by the government to empower home-buyers and bring reforms in the sector.

"We strongly oppose any such proposed amendment to IBC," Upadhyay said.

Opposing the proposed move, the association said an accused developer can not be allowed to decide in which court they should be dragged by his victim just to suit his comfort.

"We would like to apprise your government that any amendment to dilute the rights of home-buyer under IBC (Insolvency and Bankruptcy Code) will send a wrong message and derail the whole process of reforming the real estate sector," he said.

Under the IBC, a single creditor (operational/financial) whose due is rupees one lakh or more can drag a corporate entity to the NCLT, then how can a single homebuyer be barred whose financial stake will be many times more than this amount, Upadhyay added.

"It is absurd to demand that the accused should not be dragged to a court of law till his victim finds other victims and joins hands to become eligible to approach a court of law. It is akin to saying that no one should approach a police station against a person who is guilty of murder till he finds other victims of murder by the accused and joins hands," he said in the letter.

The association hoped that the Prime Minister will continue efforts to empower the home-buyers, who have immensely suffered at the hands of real estate developers since decades.

It urged the PM to ensure that "no amendment is undertaken which dilutes IBC in favour of developers and/or weakens the right of home-buyers".



Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel