The Court held that investors seeking assured returns and buy-back benefits cannot masquerade as homebuyers to initiate insolvency proceedings. The key takeaway is that IBC protection is reserved for genuine allottees, not profit-driven investors.
The Disciplinary Committee imposed a two-year suspension after finding failures in claim verification, unauthorized financial decisions, and improper treatment of homebuyers’ claims during the insolvency process.
The Disciplinary Committee held that non-disclosure of the assignment of assets worth over ₹5,456 crore in Form H amounted to a serious lapse in transparency. It emphasized that material details affecting creditor recoveries must be accurately reflected in compliance certificates submitted to the Adjudicating Authority.
The issue was whether disciplinary action against an Insolvency Professional could proceed solely on the basis of pending criminal and regulatory proceedings. The IBBI held that definitive findings would be premature until the competent forums adjudicated the underlying allegations.
The Directions impose due diligence, training, identification, and code of conduct requirements on DSAs and DMAs engaged by AIFIs. The ruling holds institutions responsible for the conduct of their marketing channels.
The Court examined whether Karnataka RERA could impose delay filing fees through an administrative circular. It ruled that such financial levies require clear statutory authority and cannot be created through executive action alone.
The RBI has mandated that NBFCs obtain explicit customer consent before selling financial products and prohibited misleading sales practices. The Directions strengthen consumer rights by introducing compensation mechanisms for proven cases of mis-selling.
The Tribunal held that landowners participating in development, revenue sharing, and allotment processes are co-promoters under RERA and cannot seek relief as aggrieved persons before the regulatory authority.
Karnataka RERA directed a promoter to provide project insurance records and proof of transfer of insurance benefits to the Association within 30 days.
The Directions require banks to publicly disclose third-party arrangements on websites and digital channels while restricting integration of referral products into banking platforms. The ruling promotes informed customer choice and operational clarity.
