The Update has been drafted by Suman Kumar Jha (Founder & Managing Partner), Afnaan Siddiqui (Co-Founder & Partner), Visakha Raghuram (Associate) and Vaibhav Khurana (Associate)
The Insolvency and Bankruptcy Board of India (IBBI) has introduced significant amendments to the Insolvency Resolution Process for Corporate Persons (CIRP) Regulations, 2016, with a special focus on real estate projects. The amendments, notified on February 3, 2025, and effective immediately, aim to enhance efficiency and stakeholder participation in the CIRP framework.
One of the key changes is the insertion of Regulation 4E, which now allows the Resolution Professional (RP), with the approval of at least 66% of the Committee of Creditors (CoC), to hand over possession of plots, apartments, or buildings to homebuyers even while the resolution process is ongoing, ensuring faster delivery of properties. The amendments also introduce Regulation 16C, which mandates the appointment of facilitators for large creditor classes exceeding 1,000 members, such as homebuyers, to streamline communication and decision-making. The total number of facilitators shall not exceed five and fee shall form part of the insolvency resolution process costs. Additionally, Regulation 16D outlines the roles of facilitators, including liaising between creditors and the authorized representative and ensuring information clarity.
Under Regulation 18(4), the CoC is now empowered to invite land authorities, such as NOIDA and HUDA, to participate in meetings without voting rights for providing their inputs, thereby enhancing regulatory oversight in real estate insolvency cases. Furthermore, Regulation 30C mandates that RPs submit a comprehensive report on the status of development rights and approvals for real estate projects within 60 days of insolvency commencement to facilitate better-informed decision-making by creditors.
The amendments also relax eligibility norms under Regulation 36A and Regulation 36B, allowing homebuyer groups to participate as resolution applicants with reduced performance security requirements. Additionally, Regulation 38(4) introduces the formation of a monitoring committee to oversee the implementation of the approved resolution plan, with quarterly reporting obligations to the Adjudicating Authority. Moreover, now under Regulation 36A (4) disclosure is required of the corporate debtor’s MSME registration status, providing clarity on applicable relaxations.
Further, it has been made mandatory for the committee to consider setting up of a monitoring committee to oversee implementation of the resolution plan. The constitution and reporting requirements of the monitoring committee has also been clarified in Regulation 38. The amendments aim to promote transparency, efficiency, and improved resolution outcomes, particularly in the real estate sector.