New Delhi: A public interest petition (PIL) was filed in the Supreme Court on Monday, seeking to protect the rights of home buyers in cases where insolvency proceedings are initiated against real estate companies.
Petitioner lawyer Vivek Narayan Sharma claimed that the Insolvency and Bankruptcy Code, 2016 (IBC) does not take into account the rights of home buyers who have invested in the projects of troubled real estate companies.
The petitioner has invoked the provisions of Article 14 (equality under law), Article 19(1)(e) (right to move freely) and Article 21 (right to life) under the Constitution of India.
The petitioner sought harmonization of rights extended to home buyers under different statutes such as the Real Estate Act, 2016 (RERA), Consumer Protection Act, 1986 (CPA) and provisions of IBC and inclusion of home buyers who have not yet received the delivery of their flats as financial/secured creditors so that they may be treated on par with others.
“While the IBC specifically and on priority protects the rights of financial and operational creditors, it fails to protect the rights of the home buyers, the petition said.
According to Sharma, if home buyers are left unsecured and at the mercy of Insolvency Resolution Professional (IRP) and committee of creditors, there is a chance they would neither get their homes nor be repaid the amounts already paid.
The apex court is hearing similar petition in cases involving real estate companies Unitech and Supertech, where it has passed orders of setting up an online portal to safeguard and aid the process of refunding home buyers.
The matter is likely to be heard on 6 October.