A joint report by ASSOCHAM and PWC highlights that Real Estate, manufacturing, and construction collectively constitute a significant 71% of the Corporate Insolvency Resolution Processes (CIRPs) admitted under the Insolvency and Bankruptcy Code until June 2023.
The report underscores that within these sectors, all major stakeholders are diligently collaborating to formulate tailored resolutions and enabling laws to address insolvency challenges. Impressively, the revival plans for companies within these sectors represent 73% of the references under the IBC.
The data published by the Insolvency and Bankruptcy Board of India (IBBI) further elucidates that “Manufacturing, real estate, and construction continue to bear the burden of insolvency procedures.” This emphasizes the enduring impact these industries have faced, constituting 71% of the CIRPs admitted until June 2023.
Deepak Sood, the Secretary-General of ASSOCHAM, acknowledged the efficacy of the creditor-friendly model of IBC, stating, “The launch of the creditor-friendly model of IBC has greatly accelerated the growth of the private credit sector in India by laying a solid platform for credit enforcement.”
In response to the challenges faced by homebuyers with stalled projects, the IBBI discussion paper proposes crucial measures. Firstly, it recommends excluding properties in possession of homebuyers from liquidation proceedings. Additionally, the proposal advocates for mandatory project registration under the Real Estate Regulatory Authority. Other key proposals include the operation of a distinct bank account for each real estate project, the execution of registration/sublease deeds with the Committee of Creditors’ approval during the resolution process, and allowing the Committee of Creditors to evaluate and invite separate plans for each project. These measures aim to provide relief and streamline the resolution process in the real estate sector, enhancing transparency and protecting the interests of homebuyers.