TaxTMI 
TaxTMI 
Equality in Financial Creditor Status: The Supreme Court's Ruling in regarding the status of home buyers in CIRP proceedings under IBC
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....d Bankruptcy Code (IBC) 2016. The appellants, who were home buyers in a project developed by Bulland Buildtech Pvt. Ltd., challenged a decision of the National Company Law Appellate Tribunal (NCLAT). The NCLAT had ruled that the order of the Resolution Professional (RP), proposing different treatment for these home buyers compared to other allottees, did not warrant interference​​. Th....
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....al creditors, and no distinction should be made within this group​​. In contrast, the counsel for the resolution professional contended that the appellants, having approached UPRERA, fell into a different sub-class of home buyers and were thus unsecured creditors​​. The court analyzed the definition of "financial creditors" and "financial debt" under Se....
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....lass of home buyers, to be unpersuasive. It emphasized that treating a segment of home buyers differently for another enactment's purposes was inequitable. The court also noted that such a distinction was a form of "hyper-classification" and violated Article 14 of the Indian Constitution, which guarantees equality before the law​​. In conclusion, the Supreme Court set as....
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....al creditors, the Supreme Court's decision ensures that their interests are adequately represented and protected in the resolution process. This judgment also serves as a precedent for future cases where the classification of creditors might be in question, thereby contributing to more consistent and equitable treatment in insolvency proceedings. In summary, "Equality in Financial Credit....