A tweak in the IBC yields more power to homeowners, but gaps remain

Buyers should consider approaching the real estate regulator first, before taking the developers to National Company Law Tribunal

The Supreme Court recently upheld the status of home buyers as financial creditors under the Insolvency and Bankruptcy Code (IBC). The judgment means that home buyers will be treated at par with other creditors and can drag developers to the National Company Law Tribunal (NCLT) if the latter default. Also, if lenders initiate recovery proceeding against a developer, property buyers will have a say in the resolution process.

The apex court’s decision does empower home buyers. It gives them an additional avenue to seek relief. But taking a developer to the NCLT may not always be the best decision. “Proceedings under