IBC Bill passed; FM highlights land authorities can join CoC meetings

Parliament passes IBC Bill allowing land authorities in CoC meetings, with around 50,000 homebuyers expected to benefit from pending real estate cases

The committee of creditors (CoC) can now invite land authorities to their meetings for inputs and perspectives on regulatory and land development-related matters under the Insolvency and Bankruptcy Code, Finance Minister Nirmala Sitharaman said in Parliament on Wednesday.

 

Responding to the discussion on the IBC Bill, which was passed in the Rajya Sabha, Sitharaman said: “Such authorities can come and authorise or comment on the legitimacy of these lands and the properties in their meetings for inputs. CoC can invite them to their meetings for inputs and perspectives on regulatory and land development-related matters.”

 

The minister said that of the 565 real estate cases admitted under the IBC, 111 cases involving 162,320 homebuyers had been resolved and another 210 were still in process.

 

 

“Out of the 210 cases, 87 cases are pending for approval of the resolution plan before the National Company Law Tribunal (NCLT). They should be finalised in the next few months. About 50,000 homebuyers will benefit,” Sitharaman added.

 

Forty-four real estate-related cases had ended up in liquidation and 200 had either been withdrawn or closed.

 

The finance minister said that the IBC was not limited to a single sector and that the CoC can direct the resolution professional (RP) to invite project-wise plans, including separate plans for each tower if there are a group of towers.

 

“The RP, after obtaining approval of the CoC and upon fulfilment of all obligations by the homebuyers, can now hand over possession of plots, apartments, or buildings to the homebuyers while the corporate insolvency resolution process (CIRP) is still ongoing. It will be a big relief for the middle class,” Sitharaman said.

 

The IBC also allows that in cases where the corporate debtor has given possession to an allottee in a real estate project, such assets shall not form a part of the liquidation estate of the corporate debtor.

 

Sitharaman highlighted other real estate-related provisions such as the appointment of authorised representatives and facilitators who can take part in CoC meetings for sub-classes within large creditor groups, such as homebuyers. This, she said, would ensure their effective participation in the insolvency resolution process.