Bombay HC rules IBC moratorium doesn't halt housing society redevelopment after developer default.
Housing Society Rights Prevail Over IBC Moratorium
The Bombay High Court ruled that the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016, does not prevent housing societies from continuing redevelopment projects after a developer’s default.
The Court held that the society’s right to redevelopment is sovereign and not a 'claim' against the corporate debtor. Hence, the moratorium restricting legal proceedings does not apply to actions taken by societies to safeguard their property and welfare.
This decision empowers flat owners and housing societies to reclaim control without waiting for insolvency resolution, balancing IBC objectives with citizen-centric redevelopment needs.