Notification/Circular No.: F.No. IBBI/2024-25/GN/REG122
Document Date: February 3, 2025
Applicable Act/Rule: Insolvency and Bankruptcy Code, 2016
Key changes include:
1. Handing Over Possession of Real Estate Units: If approved by at least 66% of creditors, the resolution professional (RP) must hand over possession of plots, apartments, or buildings to allottees who have fulfilled their obligations.
2. Appointment of Facilitators (For Large Creditor Groups): If creditors in a class exceed 1,000, a facilitator can be appointed to improve communication. A sub-class (minimum 100 creditors) must propose the facilitator. Maximum 5 facilitators can be appointed.
3. Facilitator’s Responsibilities: Assist creditors in communication with their authorized representative. Attend CoC (Committee of Creditors) meetings as observers. Provide information to creditors and clarify insolvency processes.
4. Involvement of Real Estate Authorities: CoC can invite the competent authority under RERA, 2016 to attend meetings and provide inputs.
5. Status Report on Real Estate Projects: The RP must prepare a report detailing the development rights and permissions required for real estate projects. Must be submitted to CoC for comments and Adjudicating Authority within 60 days of insolvency commencement.
6. Fee for Facilitators: Facilitators’ fees added to the list of CIRP costs.
7. Disclosure of MSME Status: Corporate debtor’s MSME registration details must be disclosed.
8. Relaxation for Real Estate Projects: CoC may relax eligibility criteria for EoI (Expression of Interest) and refundable deposit conditions for associations/group of allottees. CoC can waive the performance security requirement for such groups.
9. Monitoring Committee for Resolution Plan Implementation: CoC may form a monitoring committee to oversee resolution plan implementation.
These changes aim to accelerate real estate insolvency resolutions, improve transparency, and enhance creditor engagement.
Disclaimer: The information contained in this Article is intended solely for personal non-commercial use of the user who accepts full responsibility of its use. The information in the article is general in nature and should not be considered to be legal, tax, accounting, consulting or any other professional advice. We make no representation or warranty of any kind, express or implied regarding the accuracy, adequacy, reliability or completeness of any information on our page/article.