Six years of IBC - impact on Real Estate sector

Six years of IBC 2016 www.infralive.com 39 InfraLIVE January 15, 2023 the statutorily extended period for concluding the CIRPwas over. However, government by way of an Amendment Ordinance that came into force on June 06, 2018, cleared the doubts about the status of homebuyers and they were expressly recognised as financial creditors. The Supreme Court further issued a slew of directions for ensuring complete justice in the cause, while exercising its powers under Article 142 of the Constitu- tion of India, by providing for fur ther ex t ended per i od for conclusion of CIRP, for constitu- tion of CoC afresh and permitting the IRP to invite fresh expressions of interest for the submission of resolution plans. Further, Rs 750 crores deposited by JAL/JIL together with the interest accrued thereonwas transferred toNCLT. While the proceedings thus restored by the court were pending, further question cropped up as to the manner of reckoning the voting percentage of homebuyers in CoC. IDBI Bank sought exclusion, of the period of pendency of the applica- tion for such clarification as to the voting percentage, from the period of 270 days for completion of CIRP. While this application was pend- ing, NCLT called upon the con- cerned parties to file reply on the necessity to proceed further with the CIRP, for considering the resolution plan received from the bidder, subject to the outcome of the pending application. The orders passed by NCLT in relation to these aspects were challenged before the NCLAT. The Appellate Authority, by its judgment dated July 30, 2019, provided for exclu- sion of 90 days for the purpose of counting the total period of 270 days and disposed of the appeals with somemore observations. This gave rise to further appeals in the Supreme Court (Civil Appeal No. 8437 of 2019; Jaiprakash Associates Ltd and Anr v/s IDBI Bank Ltd and Anr), which were decided on November 06, 2019. The Apex Court again used the plenary powers and issued yet and Ors). Later large number of homebuyers impleaded in the matter. The same month, the Supreme Court stayed the insol- vency resolution process. However, on appeal, it permitted the IRP to continue. It ordered the holding company JAL to deposit Rs 2,000 crore with the court registry by October 27, 2017 particularly looking at the claim of refund being made by large numbers of the homebuyers. By March 2018, the company deposited only Rs 550 crore. The Apex court again directed JAL to deposit Rs 200 crore in two instalments by May 2018. The Apex Court finally disposed of the case on August 9, 2018. The Court took note of several factors including the nature of projects, interests of a large number of homebuy e r s and unan imi t y amongst all the concerned that liquidation of the corporate debtor (CD) shall not be in the interest of any stakeholder. The Apex Court also took note of the fact that even