Insolvency Resolution Process -- Time Extension Charges of Local Authority -- Cannot be treated as CIRP cost payable by homebuyers or resolution applicant
Insolvency and Bankruptcy Code, 2016, S.5(13) -- Insolvency Resolution Process -- Time Extension Charges of Local Authority -- Time extension charges imposed by a local development authority on a defaulting developer are penal in nature and cannot be treated as costs of the Corporate Insolvency Resolution Process. Homebuyers, who constitute a class of financial creditors, and the successful resolution applicant cannot be penalised for the default of the original developer, particularly where the project is being completed through pooled contributions of homebuyers themselves.
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