The Insolvency and Bankruptcy Board of India (IBBI) has put forward modifications to tackle challenges faced by real estate projects. A key proposal requires these projects to be registered with the Real Estate Regulatory Authority (RERA). Furthermore, the IBBI recommends safeguarding homeowners' properties from liquidation proceedings.
To simplify the bankruptcy process, the IBBI suggests five key changes:
- Creating separate accounts for each real estate project.
- Empowering the Committee of Creditors (CoC) to execute lease or sublease agreements during pending proceedings.
- Enabling the CoC to review and recommend project-specific plans.
The IBBI is actively seeking public feedback on these proposed revisions, which aim to assist homeowners whose investments are tied up in incomplete projects.
Navigating the National Company Law Tribunal (NCLT)
In India, the NCLT has become a dependable avenue for resolving disputes between homebuyers and real estate developers. The Insolvency and Bankruptcy Code of 2016 mandates the NCLT to handle bankruptcy and insolvency cases involving real estate developers, even with the established presence of RERA in most states.
Understanding the NCLT
For those unfamiliar with it, NCLT stands for National Company Law Tribunal. Each month, it publishes a cause list detailing ongoing cases, accessible on their website: https://nclt.gov.in/.
The NCLT is a quasi-judicial entity primarily addressing disputes concerning Indian companies. Established in 2016 under the Companies Act of 2013, it plays a role in agreements, compromises, arbitrations, reconstructions, divestitures, and company liquidations. The Companies Act empowers the NCLT to execute its responsibilities, while the Insolvency and Bankruptcy Code of 2016 designates it as the adjudicating authority for cases relating to companies and Limited Liability Partnerships (LLPs).
Key Functions of the NCLT
The NCLT's primary functions include:
- Company Registration: The NCLT can challenge a company’s legitimacy during registration and incorporation, with the power to revoke registrations.
- Share Transfer: It addresses complaints from companies facing denied requests for share and security transfers.
- Deposits: Depositors can approach the NCLT to seek redressal for their grievances.
- Investigative Powers: The NCLT holds the authority to initiate investigations.
- Asset Freezing: Assets can be frozen during investigations for later use.
- Company Type Conversion: Converting a public limited company to a private limited company requires NCLT approval.
Decoding the NCLT Cause List
The NCLT publishes a cause list outlining cases scheduled for hearings. This list acts as a calendar of upcoming hearings, arranged according to the scheduled hearing order. The list includes information like party names, legal representation details, remarks, serial numbers, case/application numbers, purpose, relevant sections, and rules.
Accessing the NCLT Cause List Online
To access the NCLT cause list, follow these steps:
- Visit the official NCLT website: https://nclt.gov.in/
- Click on the "Cause List" tab on the homepage.
- Locate and select the "PDF Cause List" option.
- Choose the desired NCLT branch and date range.
- Click "Search" to display the cause list.