The has issued a comprehensive directive requiring all insolvency professionals managing real estate corporate debtors to strictly adhere to the , and to enhance transparency by prominently disclosing insolvency proceedings at project and corporate sites. This move, introduced via a circular dated , aims to bridge information gaps and bolster the efficiency of the for projects involving homebuyer interests.
Under the new mandate, and must ensure that information regarding their appointment and the commencement of CIRP is made public through conspicuous signage. These signboards must be installed within seven days of an insolvency professional's appointment at the main entrance or other prominent locations at each real estate project site. Additionally, notice boards must be displayed at the registered office, corporate office, site office, sales office, and any other location accessible to stakeholders. These disclosures serve as a formal notification to , , and other stakeholders, facilitating the timely submission of claims and preserving the ’s value by preventing .
Standardizing Regulatory Compliance and Information Access
The circular addresses the persistent issue of incomplete or inaccessible records for distressed real estate assets. Often, essential details regarding project registration, sanctioned plans, statutory approvals, and designated bank accounts are missing from the ’s internal records. To rectify this, the IBBI now mandates that insolvency professionals actively utilize the web portal of the concerned RERA authorities to obtain project-specific data.
The directive specifies that the IRP or RP shall gather a range of information, including current project registration status, allottee records, and the status of separate bank accounts maintained under the RERA framework. This information is vital for preparing a comprehensive , which is a foundational document for potential resolution applicants. As the Board noted, “Access to the regulatory record maintained by the RERA on its website enables the insolvency professional to prepare a more complete , assists prospective resolution applicants in formulating viable , and thereby enhances value in the resolution of real estate projects.”
Where the internal company records are deemed inconsistent or unavailable, the insolvency professional is now explicitly permitted to rely on the regulatory records maintained by RERA, subject to due verification. This shift integrates the RERA framework more deeply into the IBC process, ensuring that the oversight mechanisms already established for real estate developments continue to function during the period of insolvency.
Consulting Regulatory Authorities on
Beyond information gathering, the IBBI has introduced a mechanism for Resolution Professionals to engage directly with RERA authorities regarding the feasibility of proposed . While participation remains voluntary, the RP may invite the concerned RERA body to provide written views on the regulatory compliance and implementation aspects of any plan under consideration by the .
If such views are furnished, the RP is obligated to present them before the CoC and provide copies to prospective resolution applicants. This collaborative approach is intended to ensure that are not only commercially viable but also compliant with the stringent regulatory standards governing real estate construction and development. The inclusion of RERA’s perspective is expected to mitigate risks associated with post-resolution non-compliance or legal hurdles that frequently plague distressed real estate projects.
Enhancing Stakeholder Transparency
The requirement to display insolvency notices is not merely a formality but a core component of the Board’s strategy to promote transparency. By ensuring that all stakeholders, particularly and contractors visiting the project sites, are aware of the CIRP status, the IBBI hopes to foster greater trust and orderly claim management. The notice boards must provide the name and contact details of the appointed insolvency professional and are required to remain displayed until the conclusion of the CIRP.
Furthermore, the IBBI has stipulated that these boards must be updated immediately upon any change in the appointed insolvency professional, ensuring that stakeholders always have access to the most current information. The circular provides the latitude for professionals to display additional project-specific details if they deem it necessary under the circumstances.
This initiative follows a broader trend of reforming the insolvency framework for the real estate sector. By mandating that insolvency professionals maintain these rigorous standards, the IBBI aims to protect the interests of all stakeholders, particularly those who have invested life savings into real estate projects. The circular was issued under , reinforcing the Board's authority to set procedural benchmarks for professional conduct. The enforcement of these rules is intended to streamline the resolution process, reduce litigation stemming from lack of information, and ultimately facilitate the successful completion of projects that might otherwise languish in long-term insolvency proceedings. The practical consequence of this order is an immediate increase in the administrative responsibility of RPs, who must now function as both managers of the insolvency process and as key liaisons between the and statutory real estate regulators.
insolvency resolution - corporate debtor transparency
