Insolvency proceedings: New form allows homebuyers to seek claims from firms

August 18, 2017
ENS Economic Bureau

The government has introduced a new form under the insolvency law to enable a person who has to receive a payment from an insolvent company to seek the claim. This will enable persons such as homebuyers to make claims for undelivered flats on a company undergoing resolution under the Insolvency and Bankruptcy Code (IBC). Jaypee Infratech, which is currently under the Corporate Insolvency Resolution Process, has uploaded the new Form-F on its website.
Till now, only financial and operational creditors were permitted to seek claims under the IBC. But Insolvency and Bankruptcy Board of India (IBBI) has amended the regulations whereby claims can be made by creditors other than financial and operational creditors. Such entities should submit proof of their claims to the resolution professional, as per a notification issued by the IBBI.
“The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, and the Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017 provide for forms for submission of claims by operational creditors (including workmen and employees), and financial creditors,” the Board said.
“There could be claims from a creditor who is not a financial creditor or an operational creditor and it needs a specific form for submitting its claim. The IBBI has amended these regulations today to provide for a form (Form F) for submission claims by creditors other than financial and operational creditors,” it added.
The revised regulations come at a time when a large number of flat buyers have been left in the lurch, especially in the National Capital Region, due to long delays in delivery with developers citing fund crunch. According to the notification, the existence of the claim can be verified by way of “documentary evidence demanding satisfaction of the claim … and bank statements of the creditor showing non-satisfaction of claim”, among other options.
Once a case is admitted for insolvency or bankruptcy by the National Company Law Tribunal (NCLT), then an interim resolution professional is appointed to take the process forward. The interim resolution professional would “collect all information relating to the assets, finances and operations of the corporate debtor for determining its financial position.

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