The IBBI has notified major amendments allowing the Committee of Creditors (CoC) to retain or exclude real estate projects from CIRP with a 66% voting majority. While exclusion requires adjudicating authority approval, allottees now have representation on Monitoring Committees.
IBBI Introduces New Real Estate CIRP Rules with 66% Voting Threshold
The Insolvency and Bankruptcy Board of India (IBBI) has notified significant amendments to the Insolvency and Bankruptcy Code (IBC) framework, introducing new rules for real estate projects under Corporate Insolvency Resolution Process (CIRP). These changes, aimed at streamlining real estate insolvency proceedings, clarify that the Committee of Creditors (CoC) may recommend retention or exclusion of a real estate project from CIRP upon securing at least 66% of voting rights.
While the CoC's recommendation carries weight, the final decision on exclusion rests with the Adjudicating Authority (National Company Law Tribunal). The amendments also mandate greater stakeholder participation by granting allottees a seat on the Monitoring Committee of the corporate debtor, enhancing transparency and oversight during CIRP. These reforms reflect regulatory intent to balance creditor interests with project viability and homebuyer protection.
For legal practitioners, this means increased procedural diligence in CoC voting processes and documentation. RPs must ensure strict compliance with the updated timelines and reporting requirements. The formal guidelines and a compliance checklist have been released by IBBI for Resolution Professionals, CoCs, and corporate debtors, which should be integrated into ongoing and future CIRPs involving real estate assets.
Citations
- Insolvency and Bankruptcy Code, 2016
