During the last two decades, the Real Estate Sectors in India is one of among some important sectors that have witnessed a rapid growth. People have invested their hard-earned life savings upon these Real Estate Sectors to unlock their dream of making their dream house. With a lot of hopes and trust upon the builders, the home-buyers enter into a legal relation by signing the Builder Buyer Agreement (BBA) with the builders. The builders, through the BBA, makes a promise to serve the best goods and services. But, in recent years it has been shown cast the nature of ‘Fraud’ on the part of these Real Estate Sectors. There are certain builders like Jaypee, Amrapali, BPTP, Unitech and many others who have been found guilty for illegally and intentionally detained the buyers and for deficiency of goods and services. Along with the filing of Consumer, Civil and Criminal Cases against the builders, the Insolvency Proceedings has also been initiated against the Real Estate Sectors. Under the code, the creditors are categorized in two types such as Financial or Operational Creditors who have the legal right to initiate the Recovery Process on the admission of a default by the builders who are termed as the Corporate Debtors. Financial creditors include a person who has lent money to the debtor against the payment of interest whereas Operational Creditors includes a person who has established certain types of relationship with the debtor company such as the provision of goods and services, employment or government dues. This scenario is before the enactment of the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018. The Government on 17th August 2018 passed the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018 whose main aim to give the homebuyers the status of Financial Creditors to real estate developers and shall have the right to be represented in the Committee of Creditors (CoC). Now, the main question is how this IBC (Second Amendment) Act, provides relief to the home-buyers- The new IBC Act is helpful to the home-buyer who becomes the main victim in this builder dispute matter. In India, the construction of most of the real estate projects is being delayed or there is a delay in possession due to various reasons and the developer fined themselves in a debt trap because of such delay. The delay in the construction of projects affect the home-buyers as their large portion of hard-earned savings has been invested to make a down payment for the property, pay an EMI on the loan. This new IBC Second Amendment Act has brought new changes where the homebuyers after attaining the status of a financial creditor under the code have the right to invoke Section 7 of the IBC against an errant builder. By invoking section 7 of the IBC, the financial creditors can file an application in NCLT (National Company Law Tribunal) for initiating corporate insolvency resolution (CIRP) against a defaulting company. Also, the homebuyers have representation in the committee of creditors through an authorized representative and they can expect fast-tracking of pending court cases against leading real estate groups.
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