India’s Insolvency and Bankruptcy Code (IBC), introduced in 2016, has certainly provided a lifeline to struggling companies. However, while its effectiveness is undeniable, one can see that the IBC does not distinguish between businesses, or adapt its remit to the unique needs of certain sectors. Is this equal treatment acceptable, or must the IBC trans-form into a sector-specific law, consider the ground realities and concerns of all stakeholders?
The National Company Law Appellate Tribunal (NCLAT), while hearing Flat Buyers Association Winter Hills – 77, Gurgaon Vs Umang Realtech Pvt. Ltd through IRP & Ors acknowledged that in light of the distinctiveness of the real estate sector, the IBC-recommended Corporate Insolvency Resolution Process (CIRP) was possibly not conducive to the respondents. Taking a rather inventive approach, outside the scope of the CIRP, the tribunal permitted a promoter to disburse funds to Umang, albeit as a lender. The tribunal particularly emphasi