The IBBI has notified revised norms for insolvency resolution process paving the way for home buyers to seek relief as financial creditors, putting in place clear timelines to be followed by resolution professionals and permitting withdrawal of insolvency applications subject to certain conditions.
In a significant move, the Insolvency and Bankruptcy Board of India (IBBI) has mandated that a resolution professional should determine whether a corporate debtor had indulged in fraudulent transactions within a specified time period during the resolution process.
The IBBI (Insolvency Resolution Process for Corporate Persons) Regulations have been amended following the Government coming out with an ordinance amending the Insolvency and Bankruptcy Code (IBC) in June.
With the amended norms, there is more clarity on procedural requirements for various classes of creditors, including home buyers.
“Wherever the corporate debtor has classes of creditors having at least ten creditors in the class, the interim resolution professional shall offer a choice of three insolvency professionals... To act as the authorised representative of creditors in each class.
“... The insolvency professional, who is the choice of the highest number of creditors in the class, shall be appointed as the authorised representative of the creditors of the respective class,” an official release said on Wednesday.
In instances where the interest rate has not been agreed upon between the parties, the voting share of such a creditor would be in proportion to the financial debt that includes an annual eight per cent interest rate. This assumes significance, especially for home buyers, as it provides clarity on calculation of total financial debt.