In big relief to home buyers, the Union Cabinet on Wednesday approved an ordinance to amend the Insolvency and Bankruptcy Code (IBC).
According to media reports, the amendment will pave way for home buyers to be treated at par with banks and institutional creditors which means they will be given priority while recovering dues from bankrupt or insolvent real estate companies.
However, Union Law and Justice Minister Ravi Shankar Prasad, while briefing media persons after Cabinet meeting, refused to divulge any details about the ordinance.
“I cannot disclose anything because it’s a new legislation except to reinforce that the Cabinet has approved it,” he said.
When asked if the ordinance will bring some relief to the home buyers, Prasad said that constitutional protocol prevents him from speaking on the ordinance until it is approved by the President.
A 14-member Insolvency Law Committee had suggested to the Ministry of Corporate Affairs that home buyers should be treated as financial creditors paving way for their participation in an insolvency resolution process.