The stuck projects are like thorns in the throats of homebuyers who often find it difficult to get their due rights despite legal battles. Although it has been over five years since the inclusion of real estate project allottees as Financial Creditors under the Insolvency and Bankruptcy Code, several issues about their rights, status, treatment etc remain unresolved. One such issue is regarding the manner of counting of votes by allottees of real estate companies under IBC.
According to reports, the issue was dealt with by the Supreme Court in many cases where the court ruled in the favour of the financial creditors.
Supreme Court advocate Kumar Mihir Mishra said that given a large number of real estate allottees, it is not possible to wait for each of them to vote and only then decide how the class of real estate allottees are voting. “In view of this and to ensure that the CIRP process is not halted due to inaction on the part of allottees, the SC held that once more than 50% of the allottees present and vote to approve a plan, it will be assumed that entire (100%) class of allottees is supporting the plan,” said Advocate Mishra.
Advocate Venket Rao, who deals with RERA-related matters, said that despite the inclusion of real estate project allottees as Financial Creditors under the Insolvency and Bankruptcy Code, numerous unresolved issues persist concerning their rights and treatment. “One such critical issue pertains to the manner of counting votes by allottees of real estate companies under the IBC. The decision by the Supreme Court sheds light on this matter, providing clarity on how the votes of allottees should be accounted for, particularly in the context of approving resolution plans. This ruling underscores the importance of ensuring fair and transparent processes within the insolvency framework, ultimately safeguarding the interests of all stakeholders involved,” he said.
While the resolution of only some of the stuck projects has been achieved so far, it’s the buyers/investors who remain at the receiving end as their hard-earned money gets trapped in a dark future. They can only hope that a good sense prevails upon all leading to justice for them.