Reverse CIRP: It is too early for realtors facing insolvency to cheer

The NCLAT judgment gives the promoter another chance to complete the pending project, and hand over the delivery of flats to homebuyers through a tribunal-monitored process

The reverse corporate insolvency resolution process (CIRP), the latest concept being experimented with upon a suggestion of the National Company Law Appellate Tribunal (NCLAT), has put the promoter back in charge of a project undergoing insolvency resolution. Currently, this is being tested in the case of a Gurugram-based real estate project.

While real estate companies are cheering the NCLAT decision as it puts them back in the driver’s seat, legal experts and insolvency professionals are concerned that the judgment might have a far-reaching impact on the sanctity of the CIRP.

Real estate players say the NCLAT decision will protect the rights of