FM says govt will safeguard interests of homebuyers

NEWDELHI: Union finance minister Nirmala Sitharaman Thursday said the government was fully aware of the difficulties faced by home buyers and assured that all steps were being taken to protect their interests.

Replying to a debate in the Rajya Sabha on the Insolvency and Bankruptcy Code Amendment Bill, 2020 which replaced an Ordinance issued last year, the minister said the legislative changes seek to avoid frivolous litigation while protecting the interests of stakeholders in the bankruptcy resolution process.

The bill, which introduces an additional threshold for certain classes of financial creditors including home buyers, for taking defaulting companies to bankruptcy courts, was passed by the Rajya Sabha on Thursday. The bill was earlier cleared by the Lok Sabha. As per the new threshold introduced, at least 10% of home buyers or 100 home buyers have to jointly initiate the bankruptcy process against builders who default on delivering homes. Before the Ordinance, a single home buyer could take a builder to a bankruptcy tribunal.

“I want to assure the House we are taking care of their (home buyers’) interest…To avoid frivolous litigation, the ‘100-10’ threshold is introduced. We have had several issues of one home buyer asking—rightly so—for justice and the bankruptcy resolution process getting delayed. The time value of money shall also be kept in mind,” the minister said.