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Chandra Bhushan who had bought a plot in Noida waited for almost two years to get possession of the flat. When he did not get possession of the flat even after two years, he decided to approach UP Real Estate Regulatory Authority (UP RERA) for the delay of the developer. UP RERA awarded him with some compensation to be given the developer of the real estate. He was not very content with the award and decided to approach the National Company Law Tribunal (NCLT) and claim a total refund of the amount paid by him by the developer.
Everyday many homebuyers approach National Company Law Tribunal for relief caused by the real estate developers. This is in turn leads to those real estate companies getting dragged to NCLT for insolvency proceedings. It is said that RERA provides relief to the homebuyers but that order received need to be implemented and for its implementation; people need to approach National Company Law Tribunal anyway. Therefore in order to save time and effort, people think it is better to approach NCLT in the first instance itself.
According to the amendments made in the Insolvency and Bankruptcy Code in 2016, the homebuyers have been given the status of financial creditors and are allowed to become a part of the Committee of Creditors (CoC) to protect the buyers’ interest. It is also stipulated that even one homebuyer could get the real estate company to get involved in the insolvency proceedings
However the Ministry of Corporate Affairs (MCA) said that there should be a minimum threshold on the number of homebuyers to be able to initiate insolvency proceedings against a real estate developer. This has been done that so that the homebuyers do not misuse their powers and rights given to them. This threshold has not yet been implemented. Thus it can be clearly seen that NCLT has become a better option for the homebuyers to get relief if aggrieved by the builders and not RERA as the order given by it is very difficult to get implemented.
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