Articles

Introduction

“The first requirement of a sound body of law is, that it should correspond with the actual feelings and demands of the community, whether right or wrong.” – Oliver Wendell Holmes Jr.

The concept of ‘Reverse Insolvency’ was alien to the Insolvency and Bankruptcy Code, 2016. It is a well acknowledged fact that the Code has undergone several amendments since its inception. One of the most prominent being, inclusion of homebuyers as financial creditors. But the corporate insolvency resolution process of Real Estate Company was not that uncomplicated. The process posed a major hurdle in terms of the rigorousness that could prejudice the rights of homebuyers.

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About Moratorium granted by RBI

In the wake of the coronavirus pandemic, RBI had announced a moratorium on repayment of debt beginning March 1, 2020, to help tide over the financial problems for disruption in normal business activities till 31st May 2020 which was extended for till 31st August 2020.

As per the RBI circular, interest would continue to accrue on the outstanding portion of the term loans during the moratorium period. This means a borrower will have to bear the burden of additional interest if he/she chose to avail the benefit.

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Latest Procedural Developments vis a vis the I&B Code

The Insolvency and Bankruptcy Board of India (‘The Board’) on 13^th November 2020 through a press release has notified various procedural amendments in the regulations pertaining to the Insolvency Resolution Process for Corporate Persons Regulations, the Liquidation Process Regulations and the Information Utility Regulations.

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