Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 4.5
Article rating: No rating
Article rating: 4.0
Article rating: 5.0
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
RSS

News

Conflicts between IBC, RERA evident in recent bankruptcy proceedings: Assocham

Author: IANS/Monday, April 23, 2018/Categories: Government

Conflicts between IBC, RERA evident in recent bankruptcy proceedings: Assocham

New Delhi, April 22 - Both the Insolvency and Bankruptcy Code (Code) and the Real Estate (Regulation and Development) Act, enacted in 2016, appear to be pitted against each other as far as protecting the interests of bankers and home buyers area concerned, Assocham said on Sunday.

This is the finding of an Associated Chambers of Commerce and Industry (Assocham) - Thought Arbitrage paper, the industry body said in a statement here. 

"The conflict between IBC and RERA came to the fore in quite a few bankruptcy proceeding in the recent times. IBC and RERA have areas where there are possibilities of conflict in operation. 

"While IBC allows companies to file for bankruptcy to provide relief to debtors or creditors, RERA looks at providing relief to home buyers and seeks to hold developers or builders responsible if the project is delayed," the paper said.

Under the IBC, home buyers are "unsecured creditors" and, consequently, their priority to be compensated comes after those institutional or other creditors who have given loans to the developer.

Assocham cited the latest case related to an Amrapali project where the Supreme Court held that financial creditors cannot take over homes belonging to the home buyers, upholding, thus, the rights of home buyers ahead of the creditors.

"This amply demonstrates the fundamental contradiction between IBC and RERA - while one tries to give primacy to the creditors the other tries to put consumers before creditors," the statement said.

"Since IBC was legislated in May 2016, after RERA was passed in March 2016, legal experts opine that the Insolvency Act will override RERA, in case of a conflict."

"In some cases, that might undermine the actual objective of consumer security, with which RERA was enacted," it added. 

According to the report "the fundamental contradiction between these two may drag cases to judicial and legal forums."

"Synchronising Bankruptcy Act with RERA may be a better way to tackle this problem," Assocham Secretary General D.S Rawat said in a statement.

Effective implementation of RERA has the potential to drastically change the composition, operation and financing of the sector, particularly the residential real estate sector, the report said.

 

Print Rate this article:
No rating

Number of views (79)/Comments (0)

Kavita Giridhar Mallya

IANS

Other posts by IANS
Contact author

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest
 
 

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free