Home buyers should be treated as financial creditors for the Insolvency process, the MCA-appointed Insolvency Law Committee (ILC) has suggested.
They should be treated as financial creditors owing to the unique nature of financing in real estate projects and the treatment of home buyers by Supreme Court in ongoing cases, said the ILC report made public on Tuesday.
Needs amendments
The insolvency law should be amended to clarify that amounts raised under a real estate project will qualify as a financial debt, according to the report.
The report, prepared by a 14-member panel headed by Corporate Affairs Secretary Injeti Srinivas, said that any move to classify home buyers as financial creditors would enable them to participate equitably in t…
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