The Insolvency and Bankruptcy Board of India (IBBI) has notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2025, effective from February 3, 2025. These amendments aim to enhance the efficiency of the corporate insolvency resolution process (CIRP), particularly in the real estate sector.
One of the significant changes allows Resolution Professionals (RPs) to hand over possession of plots, apartments, or buildings to homebuyers during the insolvency process, provided the committee of creditors (CoC) approves and all obligations are met. To facilitate better representation of large creditor classes such as homebuyers, the amendments introduce facilitators who will assist in communication between creditors and authorized representatives. Additionally, CoCs can now invite land authorities such as NOIDA and HUDA to meetings for their insights on regulatory and development matters, thereby improving the feasibility of resolution plans.
To further enhance transparency in real estate projects, RPs must now submit a detailed report on development rights, approvals, and permissions within 60 days of insolvency commencement. CoCs have also been empowered to relax certain conditions for homebuyers’ associations or groups seeking to participate as resolution applicants, including eligibility criteria and financial security requirements. Furthermore, CoCs are encouraged to form a monitoring committee for overseeing the implementation of approved resolution plans, ensuring timely execution and accountability.
Another key amendment mandates RPs to disclose the corporate debtor’s registration status as a micro, small, or medium enterprise (MSME), allowing potential resolution applicants to take advantage of benefits available to MSMEs under the Insolvency and Bankruptcy Code, 2016. These reforms collectively aim to expedite resolutions, protect stakeholder interests, and provide much-needed relief to distressed homebuyers in insolvency proceedings.
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