Elevation of Status of Homebuyers Under the Insolvency and Bankruptcy Code, 2016: A Timeline

This research paper discusses the challenges faced by the homebuyers in initiating or continuing legal proceedings against the defaulting real estate companies that have been admitted to the CIRP due to the imposition of moratorium under section 14 of IBC, 2016 and the steps taken by the judiciary and legislature to move the homebuyers out of this state of uncertainty. For the first time, the judiciary took note of the plight of homebuyers in Chitra Sharma v. Union of India. The amount paid by the homebuyers as advances, in this case, was claimed to be INR 15,000 crore more than what was due to financial creditors, and yet the homebuyers were initially not included in the CIRP. Such grave anomalies compelled the parliament to amend the existing law and provide for the inclusion of homebuyers under IBC as ‘Financial Creditors.’