ValkyaEditorial

Tagged “section-5-8-f”

1 article on section-5-8-f.

Landmark JudgmentSupreme Court of India

Pioneer Urban Land v. Union of India: the constitutional validation of homebuyer-as-financial-creditor and the harmonious co-existence of IBC and RERA

On 9 August 2019 a three-judge bench of the Supreme Court, in Pioneer Urban Land and Infrastructure Ltd v. Union of India, upheld the 2018 Amendment to the Insolvency and Bankruptcy Code that deemed homebuyer advances 'commercial effect of borrowing' and thereby financial debt under Section 5(8)(f), held that IBC and RERA operate in different fields and co-exist harmoniously with Section 238 IBC controlling on conflict, and drew the doctrinal line between genuine allottees with possession intent and speculative investors seeking only refund or profit. A close reading of Justice Nariman's judgment, the constitutional analysis on Articles 14, 19(1)(g) and 300A, the field-occupation reasoning and what practitioners advising developers and homebuyers should take from the case.

Valkya Editorial··14 min