Home buyers to be treated as financial creditors: Government
New Delhi, May 25: In a huge relief for home buyers, the Central government on Friday said they would now be treated as financial creditors and would have a share in the proceeds earned by sale of assets of bankrupt real estate companies.
"Good news for home buyers: Now in situation of real estate companies going bankrupt, home buyers will have a share along with banks in the auction of assets of such companies," Finance Minister Piyush Goyal said in a tweet in Hindi.
"This decision will bring relief to lakhs of home buyers in the country," he added.
The Minister was apparently referring to an ordinance approved by the Union Cabinet on Wednesday making amendments to the Insolvency and Bankruptcy Code (IBC) and now awaiting the President's approval.
IT and Law Minister Ravi Shankar Prasad had then refrained from revealing details of the ordinance saying protocol prevented him from divulging more details before its approval by President Ram Nath Kovind.
Along with his tweet, Goyal shared a news article in Hindi about the Cabinet approval to the ordinance.
Earlier, the Insolvency Law Committee (ILC) set up by the Corporate Affairs Ministry had suggested that home buyers be treated as financial creditors to enable them to participate equitably in an insolvency resolution process.
The report of the 14-member committee, headed by Corporate Affairs Secretary Injeti Srinivas, that was made public last month had also suggested relaxations for micro, small and medium Enterprises (MSMEs) under the IBC which came into force in December 2016.
Recommending relief for home buyers stranded due to real estate projects left incomplete by promoters facing insolvency proceedings, the panel suggested home buyers be treated as financial creditors owing to the unique nature of real estate financing and their treatment by the Supreme Court in ongoing cases.
Notably, classification as financial creditors would enable home buyers to participate equitably in the insolvency resolution process under the Code.
Under the IBC, 'financial creditor' refers to any person to whom a financial debt is owed.
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Cong prepared for upcoming Bagalkote, Davangere South Assembly bypolls: Siddaramaiah
Bagalkote (Karnataka) (PTI): Karnataka Chief Minister Siddaramaiah on Saturday asserted that the Congress is ready for the upcoming by-election to the Bagalkote and Davangere South Assembly constituencies.
Bypolls for the Bagalkote and Davanagere South assembly constituencies are necessitated following the deaths of sitting Congress MLAs H Y Meti and Shamanur Shivashankarappa, respectively.
"The preparations for the bypolls are completed. We are ready for the byelection," Siddaramaiah said in response to a question about the bypolls.
Stating that the Congress high command will decide the candidates for the bypolls, the CM said, "In Bagalkote, late H Y Meti's family members are also strong aspirants. It is not wrong to have aspirations; we (state leaders) will consider all aspects and recommend a candidate. The high command will make the final decision."
The bypoll date may be announced within a week, he added.
The state Congress had recently constituted steering committees for both segments to select candidates and formulate necessary electoral strategies for the victory of party candidates.
In Bagalkote, Congress's Meti defeated BJP's Veeranna Charantimath by a margin of 5,878 votes in the 2023 Assembly polls. In Davangere South, Congress's Shivashankarappa defeated BJP's B G Ajay Kumar by a margin of 27,888 votes.
On the LPG supply constraints, especially commercial cylinders, caused by the West Asia conflict, the chief minister said it is the central government's responsibility to ensure supplies.
"Who should supply gas cylinders? It is the central government. If they supply, the state will ensure distribution. Our Food and Civil Supplies Minister (K H Muniyapopa) has held two meetings (with oil companies). I wrote a letter to the concerned central minister to ensure there is no shortage. It is the responsibility of the Government of India," he added.
To a question regarding the implementation of internal reservation in recruitment to government jobs, Siddaramaiah said he has called a special cabinet meeting to discuss it on March 27 and a final decision will be made there.
There are reports about alleged rifts between SC (Right) and SC (Left) factions within the ruling Congress regarding internal reservation during the recruitment announced for 56,432 vacant jobs.
The state government had recently decided to conduct recruitment based on the reservation order in force before December 28, 2022 (15 per cent for SCs and 3 per cent for STs), due to the stay on the enhanced quota and internal reservation, while continuing to pursue its case in court.
