The Supreme Court on August 9th, 2019 approved the Constitutional validity of Section 5(8) (f) of the Insolvency and Bankruptcy Code. Now the home buyers can demand a refund on their investment against real estate developers for any delay in delivering residential projects by approaching the National Company Law Tribunal (NCLT), Real Estate Development Authority (RERA) and the Consumer Forums.
The result of this new proposal is the buyers can file a complaint against builders who have not delivered projects in agreed time limit at National Company Law Tribunal (NCLT) requesting initiation of the resolution process. The court heard a petition filed by many real estate companies, challenging the constitutional validity of the amendment and around 400 homebuyers made submissions supporting the amendments.
The Advocate Aditya Parolia and PSP Legal Piyush Singh represented homebuyers in the lead matter honored the judgment as it is an immense assurance of relief for the aggrieved homebuyers. This Supreme Court proposal would curb the fraudulent and unscrupulous builders and will work towards the betterment of the real estate industry and the economy of the country.
Supreme Court Benefits to Home Buyers
- The court decided that homebuyers can complain against developers for any redressal disputes through three schemes including RERA, IBC, and Consumer Protection Act.
- They assured the RERA and IBC work effectively to solve the buyer disputes.
- RERA assures that the projects to be constructed and delivered to the buyers in time and if any builder does fraud in the transaction process the consumer's money must be refunded.
Lastly, the court noted that several states and union territories have appointed arbitrating officers for RERA as well as the Appellate Tribunal. The central government was directed to ensure that the NCLT and NCLAT are protected with sufficient members to deal with litigation that may arise from the real estate sector. The Central Government was ordered to file an affidavit on the steps taken in this regard, within three months.
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By: Shailaja K