Good news for home buyers. Their money will not sink into the builders’ project. Now home buyers in residential projects will get equal status in financial credits. In insolvency law, they have got status like banks. President Ram Nath Kovind has given the green signal to the insolvency and bankruptcy code (Amendment) Ordinance, 2018.
An official statement has been issued about this. It has been stated that the ordinance has given great relief to the home buyers by giving status of Financial Creditors. This will give them the right to represent in the Lending Committee (COC). This will make them an integral part of the decision-making process.
Besides, the home buyers will be able to use Section 7 of IBC against the developers who are disturbing. This section of the law gives financial credentials i.e. financial lenders the right to apply for the start of the bankruptcy settlement process.
This step has been taken at a time when the buyers’ money is trapped in many stolen and half-in-fact projects of real estate companies. They are facing difficulties. The micro, small and medium enterprises (MSME) of this law will also benefit.Under the law, there is a special provision for them. The immediate advantage of this will be that the promoter of the venture going through the Corporate Insolvency Resolutions Process (CIRP) will not be able to bid for it.
The central cabinet approved the ordinance for 23 May.There are also strict provisions for withdrawing the case under the law. Such cases can be withdrawn only after the permission of COC.There should also be an opinion of 90 per cent of the committee members. The time limit and modalities of the settlement process have been further clarified in the book of Judaism.
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