SC upholds homebuyers' status as financial creditors in insolvency law

Apex court asks government to fill vacancies in NCLT, NCLAT and RERA within three months, submit status report

In a big setback for real estate developers, the Supreme Court on Friday upheld the amendments made to the Insolvency and Bankruptcy Code (IBC) that classified homebuyers as financial creditors. Holding that the Real Estate Regulation and Development Act (RERA) is to be read harmoniously with the IBC, a three-judge Bench led by Justice Rohinton Fali Nariman said while the two pieces of legislation must co-exist, “in the event of a clash, RERA must give way to the Code”.

“Remedies that are given to allottees of flats or apartments are therefore concurrent remedies… such allottees of flats or apartments being in