But their rank in the hierarchy of creditors was lower than that of financial and operational creditors. This form is for creditors who don’t fall under any of the previously defined categories of creditors in the code. However, by defining homebuyers as creditors, does this amendment also allow homebuyers to file insolvency petitions against developers? In case of Rubina Chadha, NCLT, Delhi, held that the appellant could not satisfy the tribunal that they come within the meaning of financial creditors or operational creditors. “NCLAT did not decide whether or not the homebuyers would be the operational creditors or financial creditors,” said Shetty.

Source: Mint August 27, 2017 18:11 UTC