Real estate constitutes an essential segment in India’s economic structure, as it provides shelter to all, including the marginalised and vulnerable communities. The home buyers and allottees of real estate projects were brought into the segment of financial creditors as the Insolvency & Bankruptcy Code 2016 (IBC) came into effect. The law further took a plunge when it was noticed that in real estate investments, frustrated buyers started rushing to seek refuge in the IBC 2016, frustrated by the delays in the completion of the project. The law, as it stands on date, stipulates that in respect of the financial creditors, who are allotees in a real estate project, the application for initiating Corporate Insolvency Resolution Process (CIRP) shall be filed jointly by not less than 100 of such allotees or at least, 10 per cent of total number of such allotees under the same real estate project, whichever was less. The financial creditors arising from real estate projects had thus seen a reasonable classification, which tested the waters of constitutional introspection in Manish Kumar’s[1] case.
