The Cabinet on Wednesday approved promulgation of an ordinance to amend the 16-month-old Insolvency and Bankruptcy Code (IBC), which proposes to classify home buyers as “financial creditors” at par with lenders to help them quickly get refunds from defaulting companies.
The amendment comes months after a new Section 29A was added into the bankruptcy code in November, introducing four layers of ineligibility for potential bidders. The present amendment is based on recommendations of a 14-member government appointed committee that had last month suggested a slew of measures, including addressing woes of home buyers and making recoveries easier for lenders.
Briefing journalists after the Cabinet meeting, Minister for Law and Justice Ravi Shankar Prasad said, “it’s a new legislation...the Cabinet has approved it.” He, however, refused to divulge details citing constitutional provisions. Asked if the Cabinet has cleared some relief measures for home buyers as per the recommendations of the panel, he said, “An Ordinance, till it is approved by the President, I cannot speak about the details.”
The IBC provides for market-determined and time-bound insolvency resolution process
