Homebuyers get separate form to claim their money

REPRIEVE Insolvency and bankruptcy board introduces Form F for homebuyers. Till now, only financial creditors were permitted to seek claims under insolvency and bankruptcy code

Buyers of undelivered flats can now seek claims under the revised regulations of insolvency law.

“IBBI (The Insolvency and Bankruptcy Board of India) on Wednesday night added a form-F for homebuyers. Earlier the homebuyers didn’t have a specific form to be filled up to claim refund from a builder. The government added it after the homebuyers’ protests. Now, there is no confusion on filing claims. Earlier, the buyers were filling claims in Form C under financial creditors, “said Pawan Chaturvedi, Delhi High Court lawyer and expert in insolvency and bankruptcy code and real estate.

Till now, only financial and operational creditors were permitted to seek claims under the Insolvency and Bankruptcy Code (IBC). Under pressure from homebuyers, however, the IRP was accepting claims under the category of financial creditors from homebuyers.

The revised regulations come at a time when thousands of home buyers had been left in the lurch after the Allahabad bench of the National Company Law Tribunal (NCLT) admitted IDBI’s plea for initiating insolvency proceedings against Jaypee Infratech for defaulting on a ₹526-crore loan. Also, Bank of Baroda has approached the NCLT seeking to start proceedings for insolvency against Amrapali for defaulting on loans.

The Insolvency and Bankruptcy Board of India (IBBI), which is implementing the code, has amended the regulations whereby claims can be made by those other than financial and operational creditors.

Such entities should submit proof of their claims to the interim resolution professional or resolution professional, as per a notification issued by the IBBI on Wednesday.

“There could be claims from a creditor who is not a financial creditor or an operational creditor and it needs a specific form for submitting its claim. The IBBI has amended these regulations today to provide for a form for submission claims by creditors other than financial and operational creditors,” the IBBI said in a release.

The form can be submitted under the Corporate Insolvency Resolution Process.

According to the notification, the existence of the claim can be verified by way of “documentary evidence demanding satisfaction of the claim... and bank statements of the creditor showing non-satisfaction of claim”, among other options.

Once a case is admitted for insolvency or bankruptcy by the NCLT, then an interim resolution professional is appointed to take the process forward. In Jaypee case, the NCLT has appointed Anuj Jain the interim resolution professional.

Jain would “collect all information relating to the assets, finances and operations of the corporate debtor for determining its financial position.

Under the IBC, financial creditor implies any person to whom a financial debt is owed. The financial debt can include money borrowed for interest.

Operational creditor means a person to whom a company owes an operational debt, which includes those with respect to provision of goods or services.