Expert's take on doubts surrounding IBC and MahaRERA

DNA, brings to its readers expert's take, where experts from a variety of fields take questions and give ready answers to issues close to citizen's heart. Our experts will take your questions and offer their expertise. Today we bring to you our expert's take on consumer issues.

I had booked a flat with HDIL. Due to long delay in delivery of the flat I have filed a case in the state commission last year. I now understand from social media that HDIL has declared insolvency. In such case what will be the fate of my case? Will I get my money back with interest and compensation?
— Swaminathan S

As far as I know, HDIL has not declared insolvency as yet. But it is true that some homebuyers have filed a complaint before National Company Law Tribunal (NCLT) against HDIL under Insolvency & Bankruptcy Code (IBC). Under IBC, homebuyers are recognized as “Financial Creditors” and therefore they can pursue their claims before NCLT against the Builders who are the “Company” registered under Companies Act. The effect of such complaint is that any other complaints against the same builder before Consumer Court under the Consumer Protection Act or before MahaRERA under RERA Act get automatically stayed. As such your complaint before state commission cannot proceed further. You should, therefore, lodge your claim with proof against HDIL at NCLT Bench in Mumbai before September 8. Claim forms can be downloaded from HDIL website: http://www.hdil.in or https://www.ibbi.gov.in.

Our Building is over 45 years old but is still in good condition. Some members are keen to go for re-development but some members are against it saying that as per the RERA Act, the existing members of the society are not covered under RERA. What is the actual legal position?
— Hemant Belwalkar

As per Section 3 of RERA, every real estate project in the state is required to be registered with MahaRERA, except where the area of the land to be developed is less than 500 sq meters or having less than eight apartments. It also excludes re-development projects which do not involve marketing, advertising, selling or new allotment of any apartment. However, all re-development projects invariably involve the add-ons. But then the Act also permits real estate project to be developed in phases. The developers take advantage of this provision and show existing members' portion (rehab portion) as a separate phase and thus try to escape RERA registration. However, it does involve new allotment for the existing members and therefore, even such rehab portion is also required to be registered, according to my understanding of RERA. Even MahaRERA Authority is now convinced that rehab portion has to be registered with MahaRERA and hence it has proposed suitable amendment in the state rules to ensure that the entire re-development project, including rehab portion, will be registered under MahaRERA.