The Centre is mulling changes in the insolvency law for faster wrapping up for builder insolvencies, reported US news agency Bloomberg.  According to the report, which quoted unnamed sources, the changes in the Insolvency and Bankruptcy Code (IBC) are aimed at helping homebuyers by way of permitting resolution of the cases on a project-wise basis.
Changes in the insolvency law would allow for buyers to get possession of their homes even when the insolvency proceedings against the builder are underway.
As part of this plan, the government would establish a centralised platform for registration of cases, simplify pre-packaged resolution plans and provide flexible plans for handling operational and nonviable assets separately, the report added.
While presenting the Budget 2022-23, finance minister Nirmala Sitharaman has said the government would make necessary changes in the Insolvency and Bankruptcy Code (IBC) to improve the resolution process. The government introduced the IBC in 2016 to resolve insolvency cases amid a spike in the number of bankruptcies. However, the IBC was not successful in addressing the issue as well as it was expected to. As of June 2022, 436 out of the pending 1,999 cases of corporate insolvency were from the real estate sector, government data show.
See also: Coastal Projects, Zoom Developers among India’s top-50 wilful defaulters
