Noida: At the time when homebuyers and investors are reaching out to the court against amendment of the Insolvency and Bankruptcy Code (IBC) 2016, the Supreme Court on Tuesday issued notice to the government to seek its reply in the matter, sources aware with the development said.
With notices issued to the government, the petitioners (homebuyers) assumed a partial relief, however, the legality and constitutional validity of IBC Act (amendment 2019) will be tested by the apex court after hearing the government and the homebuyers, said Mihir Kumar, advocate appearing for a section of homebuyers.
The government recently amended the Insolvency and Bankruptcy Code (IBC) 2016 through an ordinance introducing a threshold of minimum 100 or 10 percent of allottees in a project or class of investors required that can approach the NCLT in order to start the liquidation process against the defaulting developer.
Kumar told that challenging the ordinance, group of homebuyers and investors had filed multiple writ petition with the Supreme Court challenging the amendment. Homebuyers argued that the amendment is arbitrary and discriminatory.
The Supreme Court, while hearing the petition on Tuesday said that till further hearing, the National Company Laew Tribunal (NCLT) can’t reject the applications of the homebuyers or investors for non-compliance of the new amendment brought in by the government introducing a minimum threshold for filing application under the IBC 2016.
The amendment required the existing applications which are yet to be accepted by NCLT to comply with the new regulations within 30 days of the passing of the ordinance.
“Condition of threshold is harsh on the buyers who will have no means to know details of other allottees and therefore, it will be very difficult for them to meet the threshold. The matter is under the supervision of the Supreme Court and we will present homebuyers' grievances,” Kumar added.