How An Insolvency Case Against Builder By Another Buyer Affect Other Buyers?

One of the buyers of another project has filed an insolvency case against the developer. How can this affect us, as buyers/investors of other Project of the same developer? What action should we take?

Answer (1)

Aayushi Sang

  • Sector-1, Noida

The homebuyers after attaining the status of a financial creditor under the code have the right to invoke Section 7 of the IBC against en errant developer. By invoking section 7 of the IBC, the financial creditors can file an application in NCLT (National Company Law Tribunal) for initiating corporate insolvency resolution (CIRP) against a defaulting company.

However, the cases filed by some buyers do not affect the rights and interest of other homebuyers unless the homebuyers join the case as well.

Answered on 16 Sep 2019

Was this answer helpful?

Yes   No

Didn't find the answer you are looking for?

Talk to experienced lawyer online and get your answered in minutes.