People’s forum FPCE wrote to a parliamentary panel on finance, opposed an amendment to the insolvency law seeking to require a minimum number of flat owners to petition the National Company Law Tribunal (NCLT) against default builders. In December a decree was promulgated in this regard.
In a real estate project, whichever is less, it introduced a minimum threshold of 100 or 10 percent of total allotted persons to move a joint plea seeking to initiate insolvency proceedings against a realtor.
Forum for People’s Collective Efforts (FPCE) wrote to Jayant Sinha, chair of the panel on the Insolvency and Bankruptcy Code (Second Amendment) bill introduced at Parliament’s last session, 2019.
“We strongly oppose the proposed amendments/insertions set out in Clause 3 of the proposed law seeking to amend IBC, 2016, Section 7,” FPCE President Abhay Upadhyay stated.
The said modifications/insertions require a minimum threshold for homebuyers to come together to begin proceedings against any real estate developer/companies under the code. This is against the interests of homebuyers, as it imposes unfair restrictions on them, eliminates the level playing field that currently exists, and makes the law lopsided in favor of real estate developers, “he added.
The FPCE called the amendment “illogical, unconstitutional and regressive.” It said the amendment is riddled with practical difficulties to introduce a minimum threshold for homebuyers to approach the NCLT and identified various problems.
The sale is a lifelong process. When will a homebuyer know when many units sold to calculate the 10% of the total number of units sold in a real estate project, particularly when 10% is less than 100? “They asked.
The FPCE said it would be difficult for a buyer to locate the contact details of the number of purchasers involved in the project to begin bankruptcy proceedings against the owner.
We, too, would like to ask you to kindly give us an appointment for our pan-India delegation to depose before the Committee and present our case, “said Upadhyay, Who is a member of the Central Consultative Committee, RERA, Ministry of Housing.