Due to rising costs and pandemic-induced lack of demand, many real estate companies have gone bankrupt. As of June 2022, of the 2,000-odd cases under corporate insolvency resolution process (CIRP), a staggering 436 cases were from the real estate sector.
The resolution of insolvency in the real estate sector presents unique difficulties due to the sectors peculiarities. While initially homebuyers were categorized as other creditors, there was a sea-change in the legal position after the Supreme Courts decision in Chitra Sharma v. Union of India and Bikram Chatterji v. Union of India wherein homebuyers were recognized as essential stakeholders in the insolvency resolution process of real estate enterprises. After the 2018 IBC amendments, …
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