Centrik Business Solutions Pvt. Ltd.
Centrik™ is a team of highly experienced professionals and advisors including bureaucrats, ex-government officials, advocates, bankers and other experts who provide key consulting, government liaising and advisory services, under one roof.
Relief for Creditors- Registration of default with NESL not mandatory. Status as on 21/08/2020 The National Company Law Tribunal (NCLT) Kolkata Bench imposed a mandatory condition on all the financial creditors to file information of their record of default with the National E-Governance Services Ltd.
(NESL). This move created unrest among the disgruntled creditors who now had an additional compliance. However, the Single Bench of the Calcutta High Court struck down this additional compliance. Introduction The order dated 12th May, 2020 imposed a mandatory prescription on all financial creditors, to submit certain financial information as a record of default before the Information Utility (hereinafter referred to as, “IU”) as a condition precedent for filing any new application under Section 7 of the IBC, 2016. The Univalue Projects Pvt. Issues before the Court. Compliance of Recovery Certificate (RC) issued by RERA in UP. Status as on 21/08/2020 Real Estate Recovery Authority (RERA) has streamlined and disciplined the real estate sector.
All information related to projects is in the public domain now and easily available. Transparency has increased significantly which has instilled confidence in buyers. Relief for Homebuyers- NBCC to deliver AMRAPALI flats from August. Status as on- 14/08/2020 In an immense reassurance to Amrapali Homebuyers awaiting the delivery of their homes for over 10 years now, National Buildings Construction Corporation Limited (NBCC) has said that it will hand over at least 150-200 flats every month from august.
Background More than 40,000 buyers were stuck with under-constructed projects since the past decade after Amrapali Group was dragged to the court for alleged fraud and money laundering. NBCC took over the project in July on the SC orders after a petition by homebuyers following the Amrapali Group’s failure to deliver more than 30,000 flats in 15 projects. Supreme Court takes matter into its own hands in Jaypee Infratech Case. Status as on- 11/08/2020 The Supreme Court, on 6th August, 2020, transferred to itself all the pending appeals related to debt-ridden firm Jaypee Infratech pending before the NCLAT.
A bench led by Justice AM Khanwilkar hearing several homebuyers and NBCC fixed the matter for further hearing on 31st August, 2020. Introduction Jaypee Infratech went into the insolvency process on August, 2017 leaving behind more than 20,000 disgruntled homebuyers. On November 6, 2019, the Supreme Court directed completion of Jaypee Infratech’s insolvency process within 90 days. Haryana government to introduce ordinance for preventing fraud in registry of land. Status as on- 10/08/2020 Taking a much awaited step, the government of Haryana is going to bring an ordinance to amend the Haryana Development and Regulation of Urban Areas Act, 1975.
Since last month the Haryana government had temporarily stopped the registration of land transfer deeds. REVERSE INSOLVENCY – GOOD FOR ALL (HOMEBUYERS & BUILDER) Status as on- 08/08/2020 There are multiple projects in real estate industry which are either delayed or struck for long time.
There may be different reasons for such inactivity but some of the reasons are as under: Diversion of funds from the project to another projectNegative cash-inflow from the buyersExcessive demand from the land-owners of development authoritiesLack of salesDispute between developing parties These kinds of issue are the long-standing issue which does not solve easily.
However, in the recent past, a new concept of “Reverse Insolvency” has been evolved which is the right solution for such issues. Relief for Creditors- NCLAT paves way for extending the period of limitation. Relief for Homebuyers- Jammu & Kashmir RERA Notifies RERA Rules. Status as on- 06/08/2020 The Real Estate (Regulation & Development) Act, 2016 was introduced with the objective of safeguarding the interest of the home buyers.
The implementation of this landmark legislation was left to be notified by respective state or union governments. This was followed up by several states & union territories notifying the rules there under and implementing RERA. In a much-awaited manner, the Union Territory of Jammu & Kashmir has notified the rules under Real Estate (Regulation and Development) Rules 2020. It has become the 33rd state/union territory to do so. What Changes does it bring for Homebuyers? How IBC can help Homebuyers to revive struck projects. Status as on- 29/07/2020 Introduction There have been numerous cases where housing projects have either been shelved or have been completely abandoned or stalled.
The reason for such struck projects can be one single factor or can be multiple factors. Implication of Cheque Bounce under Insolvency Laws IBC. Status as on 29/07/2020 The Insolvency and Bankruptcy Code, 2016 represents radical change in the already prevalent corporate insolvency procedures, enabling creditors to restructure bad debts and rehabilitate corporate debtors within specific timelines.
Since its enforcement various other changes have also been seen and witnessed, which have on the other hand have paved way for the other prevalent laws. Recently, the Hon’ble National Company Law Appellate Tribunal (NCLAT) in the matter of M/s. Homebuyer with refund order is financial creditor, not a homebuyer any more. Status as on- 20/07/2020 The struggle of homebuyers against the defaulting builder to get their homes, has seen multiple up and down over last 5 years.
Where, on one-hand RERA Laws were implemented w.e.f. 01/05/2017 to protect the interest of homebuyers, on other hand, Insolvency and Bankruptcy Laws (IBC) laws were implemented in Dec, 2016 to provide resolution process of defaulting or sick companies. Homebuyers under RERA RERA Authorities under RERA Laws have passed multiple orders directing refund of money paid with interest or provide possession within stipulation time. The Smoke Ball Case & Legal Remedy against Misleading Advertisements. Status as on- 18/07/2020 The need for cure becomes imperative whenever humanity is faced with a life-threatening pandemic such as corona virus.
However, what follows it is a bigger challenge in the form of misleading advertisements and fake cure. Misleading advertisement is an ethical problem but becomes hazardous when it purveys products as a cure to the pandemic. Introduction. Legal Remedies for Stalled Project under RERA. Status as on- 16/07/2020 Practical Issues As per our research, there are more than 5 Lakhs of units, which are in stalled project or long delayed project.
There would be multiple reasons for such projects however the maximums projects are delayed or stalled due to diversion of money or unprofessional decisions of the builder. An Operational Creditor with an Arbitral Award can proceed as a Decree Holder. Status as on- 06/07/2020 The Hon’ble Supreme Court in K Kishan v Vijay Nirman Company Private Limited denied the holder of Arbitral Award to proceed as Operational Creditor and initiate CIRP. However, in a strange turn of events the National Company Law Tribunal has paved the way for operational creditors to revive their debt and proceed as decree holder. Introduction The recovery of time-barred debt was a challenging task up until now.
The NCLAT has however provided a new way or change in basic assumptions for the operational creditors. Factual Matrix of the Case The appeal challenged the order dated 16th September, 2019 passed by the National Company Law Tribunal, Hyderabad in CP(IB) No. 277/9/HDB/2019 whereby it admitted the petition filed by M/s Isgec Covema Limited (Operational Creditor) under Section 9 of the code. Can an Operational Creditor Proceed with an Arbitral Award proceed as a Decree Holder? NCLAT’s Order Conclusion. Revised 1 crore threshold under IBC not to apply retrospectively. Status as on- 16/06/2020 On 24th March, 2020 the Ministry of Corporate Affairs increased the threshold provided under Section 4 of the Insolvency Bankruptcy Code, 2016 from Rs 1 Lakhs to Rs 1 Crore.
But recently, the NCLT Chennai Bench opined that the Limit under Sec. 4 of IBC, can be considered only as prospective, (i.e.) applicable from 24.03.2020. Introduction The increase in the amount of default was done with the objective to ensure the viability of the economy amid lockdown. The government made reforms to ensure that lesser companies are forced into insolvency due to the economic halt created by lockdown. Relief for Homebuyers - SBI Capital comes to Rescue Amrapali. IBC Ordinance – A Bargain for both Debtors and Creditors.
Good News for Builders- SBICAPS Lowers IRR to 12 Percent in Stress Funds for Stalled Housing Projects. Haryana Government Revives Dying Hope of Mayfield Buyers by Constitution of SIT. Relief for Homebuyers of Bombay Dyeing- MahaRERA Tribunal Rules on Retrospective Effects of Section-12. Relief for Homebuyers! Extension of Moratorium implies no action under SARFAESI. Lack of Execution under RERA- Another roadblock for Homebuyers. Big Relief for Developers- Government issues direction for relaxing RERA Norms. Covid-19 Impact on the Insolvency Bankruptcy Code. Stuck with a stalled or unfinished project-What is the way Forward? MahaRERA invokes Force Majure- How and in What way it is Wrong for the Homebuyers? Completion Date of Real Estate Projects Extended- What does it mean for Homebuyers? NCLT Holds Filing of Default Record Mandatory under Section 7 Application.
Relief for MSMEs in Response to COVID-19, No Fresh Insolvency Proceedings for 1 Year. Finance Minister Unveils Measures for Second Tranche under Aatamnirbhar Bharat Abhiyan to Support Economy in Fight Against Covid-19. Relief for Homebuyers- MahaRERA to list Urgent Matters for Hearing. Insolvency Proceedings Limited to Individual Project and not other Projects of Real Estate Company: NCLAT. Covid-19 may end up making Real Estate a sound investment destination. Townships Societies will Increase: The Bright Side of COVID-19. Extension of RERA Registration cannot deprecate Homebuyers Right. Builders request for setting aside of Refund and Penalty Orders: Is it possible? Relief for Builders in Gujarat: RERA Authority grants Extension to Registered Projects
MahaRERA Splits RERA Courts causes Controversy with Lawyers. Reliance Communications Resolution Plan filed before the NCLT. Economic Survey: Insolvency and Bankruptcy Code dramatically reduced time for resolution of Stressed Assets. Karnataka RERA sets up conciliation cell to settle disputes between Builders and Buyers. 3 Years since IBC- A road to Success. HRERA-GURUGRAM- Relief for Homebuyers as Adjudicating Officer grants Refund. Parsvnath brings hope in times of uncertainty waive off Interest for homebuyers. UP-RERA to grant relaxation to developers only after being functional.
Supreme Court extends ‘Limitation Period' amid COVID-19 Crisis. Karnataka RERA extends the completion deadline of registered projects by 3 months. NBCC to handover 27,223 houses of Amrapali Group soon. COVID-19 Crisis-The government should protect the interest of the Homebuyers. MahaRERA extends the registration of Real Estate Projects by 3 month. Hope in Times of COVID- 19, 1% Concession on Stamp Duty in Maharashtra. Builders seek relief on finance from Ministry of Housing Affairs. Period of Lockdown to be Excluded from Insolvency Process- NCLAT.
Reverse CIRP under IBC- A boon or Curse for the Homebuyers? All about- Moratorium and its relevance under IBC. Decree-Holder is not covered by threshold of Home Buyers for IBC. Last Mile Funding- Government bringing relief to the Home buyers. Rise of 5% - 10% in super area will be considered justified- HRERA. Decisions taken by the committee of Creditors are Business plans which are Non-Justiciable: NCLAT. A ray of hope for Supertech Home Buyers- Company to sell assets to complete Projects. Haryana RERA issues Directions for Annual Audits of Builder’s Bank Accounts. Haryana RERA attaches 4 bank accounts of Supertech. Karnataka RERA seeks government support for the Execution of Orders. Outbreak of Covid-19 Trapped the Real Estate Sector. Withdrawal of money by directors during the CIRP, to attract criminal offence: NCLAT. Retroactively Application of RERA Act in lieu of False Advertisements. COVID19 Emergency-Government Should Protect the Interest of the Real Estate Project Developers.
How to Execute RERA Order through NCLT under IBC. Homebuyers to takeover the Delayed Projects- MAHARERA. LokSabha Clears Heavily Contested IBC Amendment Bill 2020. Corporate Debtor cannot be blamed for delay in delivery of possession when delay occurs due to Force Majeure. Interest for Delayed Period of Possession to be calculated from date of default of Handing over Possession.
No bar to Initiate Insolvency Proceedings pendency the action under SARFAESI Act or RDBFI Act. MREAT allowed delay of 14 months and 22 days to allottees. Claim amount towards interest on loan alone cannot be termed as Operational Debt. MREAT directed developers to refund the Forfeited Amount. Builders are demanding cash despite RERA and Demonetization. Employee Benefits Constitute Operational Debt. New IBC Amendments in work likely to benefit creditors in cases of Cross Border Insolvency. Insolvency plea cannot reject if the dispute is raised on telephonic communication: Allahabad NCLT. Does amount advanced as loan without proper proofs/documentations constitute a Financial Debt? Kerala Comes under the Umbrella of RERA. Claims towards the lease of immovable property do not fall within the definition of Operational Debt under IBC. How Operational Creditors can revive their time-barred debt: An analysis of the Mekko Steel Case. A timely Alarm for Project Developers of stalled projects in Bihar.
When Resolution Plan can be challenged by the aggrieved Person. Insolvency does not bar Criminal Action- Madras HC. MahaRERA orders builder to not charge for open parking spaces. No issues can be raised before any court or tribunal after resolution plan attained finality. Further litigation/alternative remedy cannot be pursued by creditors whose claim is taken into consideration within resolution plan.
Government likely to dedicate scheme to unburden NBFCS of stress assets to boost Real Estate Sector. Claim for damages cannot be an Operational Debt under IBC- Flipkart Analysis. Withdrawal from Project not Allowed under Consent Terms. Homebuyers can now move RERA against Raheja Developers. Amount paid towards lease of immovable property not an Operational Debt- NCLAT. Promoter can transfer project to third party. Contempt of HRERA Order by Orris Infrastructure & Three C Shelters.
MahaRERA Directed Epitome Residency to Refund the Amount along with Interest. Homebuyers approach parliamentary committee against ordinance infringing their rights to approach NCLT. Developing Trends in the Indian Real Estate Market.