Homebuyers will gain a stronger representation in insolvency proceedings following amendments to the Insolvency Resolution Process for Corporate Persons Regulations, 2016.

The new rules allow the appointment of an interim representative to advocate for the homebuyers while awaiting approval of a permanent representative from the adjudicating authority.

The amendments will give homebuyers a more direct and timely voice in the proceedings, addressing problems such as delays in appointing representatives and inadequate attention to their concerns.

“Homebuyers often faced significant delays in appointing authorised representatives to represent their interests in insolvency proceedings,” said Saurabh Singh, partner at Khaitan & Co. “This resulted in their concerns beingoverlooked or not adequately addressed.”

“The existing regulations lacked clarity on the appointment process for authorised representatives, leading to confusion and potential delays,” said Vishwas Panjiar, partner at Nangia Andersen India.

“Homebuyers are particularly vulnerable in insolvency proceedings, as their investments can be significantly impacted by the financial difficulties of developers,” emphasised Saloni Kothari, group general counsel at BDO India.

Abdullah Qureshi, associate partner at IndiaLaw LLP, said “the amendment addresses the issue of non-representation and promotes a more efficient and equitable insolvency resolution process.”

Sukrit Kapoor, a partner at King Stubb & Kasiva, advocates and attorneys, highlighted the significance of the amendment in plugging a gap in the Corporate Insolvency Resolution Process (CIRP) by providing clarity around the appointment process of authorised representatives and timelines.

Piyush Agrawal, Partner at Aquilaw, highlighted the introduction of interim representatives as a significant step towards ensuring that creditors’ interests are protected during delays in the appointment of authorised representatives.