The Supreme Court has issued a notice to the government of India on the petition filed by homebuyers against the amendment of the Insolvency and Bankruptcy Code (IBC) 2016. This ammendment introduced a minimum threshold for filing an application with the National Company Law Tribunal (NCLT) against a defaulting developer. “This basically means that the NCLT will have to maintain status quo with respect to the applications already filed by homebuyers and investors against defaulting developers,” said Aditya Parolia of PSP Legal, Advocates & Solicitors.
He added, that the legality of the amendment will get tested by the Supreme Court after hearing the government and the homebuyers. The government recently made changes in the Insolvency and Bankruptcy Code (IBC) 2016 through an ordinance introducing a threshold of minimum 100 or 10%of allottees in a project or class of investors required that can approach the NCLT in order to start the liquidation process against the defaulting developer.
After hearing the petition, supreme court said that the NCLT can’t reject the applications of the home buyers or investors for non-compliance of the new amendment brought in by the government introducing a minimum threshold for filing application under the Insolvency and Bankruptcy Code (2016).