SC gives homebuyers financial creditors status; upholds amendments to Insolvency Code

The bench said only genuine homebuyers can invoke insolvency proceedings against the builder and asked the Centre to file an affidavit taking the corrective measures.

New Delhi: The Supreme Court on Friday upheld amendments to the Insolvency and Bankruptcy Code (IBC), giving the status of financial creditors to homebuyers.

A bench headed by Justice R F Nariman, which disposed of a batch of over 180 petitions filed by various builders, said the RERA act which regulates the real estate sector should be read harmoniously with the amendments made in the IBC and in case of conflict the code will prevail.

The bench said only genuine homebuyers can invoke insolvency proceedings against the builder and asked the Centre to file an affidavit taking the corrective measures.

The judgment came on a batch of pleas filed by builders who have argued that remedies to homebuyers were available under the RERA Act and the amendments to IBC only enables duplication.