Distinction among sub-classes of buyers rejected by SC
Last Updated on October 16, 2023 by News Desk
All homebuyers will have equal rights and claims in the insolvency process of a real estate developer, regardless of whether they have a refund decree.
Homebuyers who got a refund decree from RERA have the same rights as other homebuyers in the insolvency process of a real estate developer.
This means that they will be treated equally and will have the same opportunity to recover their investments.
After the real estate company went bankrupt, a plan was submitted to the court to resolve the situation. The plan treated homebuyers who had gotten a refund decree from RERA differently from homebuyers who had not.
This means that homebuyers who had gotten a refund decree from RERA were not treated equally to other homebuyers in the bankruptcy process.
This was approved by the appellate tribunal, which prompted the homebuyers to approach the apex court. The court held that the provisions of IBC do not make any distinction between different classes of financial creditors for the purposes of drawing up a resolution plan.
The court found that the distinction made in the resolution plan between homebuyers with a refund decree and those without a decree was artificial and amounted to “hyper-classification” which is in violation of Article 14.
The court also observed that it would be unfair to treat homebuyers who have gotten a refund decree differently from other homebuyers, simply because they have chosen to exercise their rights under RERA.
In simpler terms, the Supreme Court has ruled that all homebuyers, regardless of whether they have a refund decree, have the same rights and claims in the insolvency process of a real estate developer.
Written By:- Shianjany Pradhan (@SHIANJANYPRADHAN)
