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Insolvency panel for treating home buyers as financial creditors
New Delhi, April 3 (IANS) The Insolvency Law Committee, of the Corporate Affairs Ministry, has 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 on Tuesday, has also suggested relaxations for micro, small and medium Enterprises (MSMEs) under the Insolvency and Bankruptcy Code (IBC) which came into force in December 2016.
Recommending relief for home buyers stranded due 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,” the report said.
Under the IBC, ‘financial creditor’ refers to any person to whom a financial debt is owed.
The report also suggested that the government exempt MSMEs from application of certain provisions of the Bankruptcy Code.
“Illustratively, since usually only promoters of an MSME are likely to be interested in acquiring it, applicability of section 29A has been restricted only to disqualify wilful defaulters from bidding for MSMEs,” it noted.
Section 29A of the IBC sets out the ineligibility criteria for bidders.
In this connection, the committee has suggested that only those who contributed to the default of the company, or are otherwise undesirable, should be ineligible from bidding for the stressed assets.
“Moreover, being mindful of the non-performing assets (NPA) crisis in the country, the need to encourage the market for NPAs was felt and accordingly several carve-outs from section 29A have been recommended for pure play financial entities.
“In order to prevent retrospective application of any proposed change, it has been recommended to add a provision that the amendments shall be applicable to resolution applicants that have not submitted resolution plans as on date of coming into force of the said amendment,” the report said.
Regarding withdrawal of the resolution application in exceptional circumstances, the panel has suggested that there should be approval from the Committee of Creditors (CoC) with 90 per cent of share of the vote.
The IBC was amended in January to prevent, among others, wilful defaulters and those whose accounts have been classified as NPAs, or bad loans, from bidding for acquiring stressed assets.
The gross NPAs in the Indian banking system have reached the staggering level of nearly Rs 9 lakh crore.
The government has embarked on a two-pronged strategy on bad loans.
On the one hand, it has brought in the IBC which provides for a six-month time-bound insolvency resolution process. On the other hand, it has approved a Rs 2.11 lakh crore recapitalisation plan for state-run banks.
In June last year, the RBI referred 12 accounts, totalling about 25 per cent of the gross NPAs, for resolution under the IBC.
–IANS
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Dr. Abhishek Verma Dedicates a Shelter in Memory of His Mother, Veena Verma, at KGMU; Inaugurated by Daughter Nicolle Verma
World-renowned business tycoon Dr. Abhishek Verma has supported Foodman Vishal Singh’s Hunger-Free World mission. In memory of his mother, Late Veena Verma, who was a 3 term Rajya Sabha MP.
Dr. Verma dedicated a state-of-the-art free permanent shelter for the attendants of patients at KGMU Medical University, Lucknow, under the aegis of Vijay Shree Foundation. His daughter, Nicolle Verma, inaugurated the shelter.
During the event, Foodman Vishal Singh honored Nicolle Verma by presenting her with a memento. Mrs. Nidhi Sharma and Avantika Yadav, associated with the organization, welcomed her with garlands. Following this, Nicolle Verma distributed essential items to the attendants and also handed out fruits. She became emotional remembering her grandmother on her birth anniversary.
On this occasion, she also inaugurated the “Veena Verma Sevalaya” in memory of her grandmother, Veena Verma, to serve the attendants. She expressed, “I feel proud that my family is engaged in nation-building as well as social service. Today, in collaboration with Vijay Shree Foundation founder Foodman Vishal Singh Ji, I feel immensely proud to dedicate this shelter for the poor, helpless, and needy attendants of patients battling serious illnesses like cancer. I am honored to be associated with the Hunger-Free World Mission for humanity.”
Inspired by the continuous humanitarian service provided by Vijay Shree Foundation over the past 17 years, Nicolle Verma donated 10 lakh rupees to support the cause. The purpose of this donation is to ensure that services continue for the needy attendants of patients suffering from severe illnesses in hospitals, as facilitated by Foodman Vishal Singh.
It is noteworthy that Dr. Abhishek Verma’s family has a legacy of public and philanthropic service. They are helping millions to carry forward the values and service work of their parents. On the occasion of his mother’s birth anniversary, Dr. Abhishek Verma dedicated this state-of-the-art permanent shelter at Lucknow Medical College to serve the attendants of patients through the Vijay Shree Foundation.
Supporting Foodman Vishal Singh’s Hunger-Free World mission, Dr. Abhishek Verma assured that he would continually support keeping this flame of humanity alive. He also promised to assist in providing medicines to the helpless patients.
Continuing her grandmother’s legacy of service, Nicolle Verma personally served food to the needy patients and attendants. She said, “It is our good fortune to have received the joy of doing this noble work today through Foodman Vishal Singh. I have taken another step forward in carrying my family’s values and cooperation by joining hands with the Vijay Shree Foundation. My father taught me to serve and help the needy, and I feel happy when I bring a smile to someone’s face.”
On the birth anniversary of the late Veena Verma, the event organizer, Vijay Shree Foundation founder Foodman Vishal Singh, said, “We feel proud and happy that Dr. Abhishek Verma, a globally renowned business tycoon, has extended his support to uplift our country from the hunger index. Today, on his mother’s birth anniversary, he inaugurated a state-of-the-art permanent shelter at Lucknow Medical College, which will always be helpful for the needy attendants of patients. It is a pleasure for me and the organization to receive the affection of Mr. Verma.”
The event was attended by General Manager Verma Family Office Hemant Garg, Sonu Rajput, and the organization’s volunteers, including Sandeep Singh, Parmeshwar Ji, Prashant Rao Gautam, Balram Singh, Ramesh Chaudhary, Suman, Jeetu, Anil, Suraj, Vinay, Manish Bhadauria, Manas Mehrotra, Vivek, Apurv, Happy, and others.
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