FINANCIAL CREDITOR CANNOT TAKE OVER HOME BELONGINGS OF HOMEBUYERS.-SUPREME COURT OF INDIA
IBC- (Insolvency and bankruptcy Code-2016) visa Vis Real estate regulation and development act 2016
IBC allows companies to file insolvency proceedings so that they can provide relief to the debtors or creditors
RERA was implemented with the sole motive of getting justice for aggrieved homebuyers and penalizing builders or developers if the project is delayed
These two laws contradict each other and the question is if developer defaults, whether the homebuyer should approach RERA or BIC.
Supreme Court in Amrapali case held that financial creditor cannot take over home belongings of homebuyers. In other words, the Supreme Court upheld the rights of home buyers ahead of the creditors.
Funds Utilization Norms set under New RERA ACT 2016
“Developer obliged to park 70% of the project funds in a dedicated bank account to ensure that developers are not able to invest in numerous new projects with the proceeds of the booking money for one project.’
The above clause comes to rescue the home buyers against BIC 2016