While dismissing the various petitions filed by builders and upholding the constitutional validity of status of allottees as financial creditors, the Hon’ble Supreme Court made several important findings and rulings as under:
| Sl. No. | Issue/ Theme | Ruling | Para / Page No. of SC Judgment |
| 1 | Economic Legislation | Legislature must be given free play in the joints when it comes to economic legislation. Apart from the presumption of constitutionality which arises in such cases, the legislative judgment in economic choices must be given a certain degree of deference by the courts. | 15/38 |
| 2 | Raison d’être
(Most important reason) for the |
a. It can be seen that the Insolvency Law Committee found, as a matter of fact, that delay in completion of flats/apartments has become a common phenomenon, and that amounts raised from home buyers contributes significantly to the financing of the construction of such flats/apartments.
b. It was important, therefore, to clarify that home buyers are treated as financial creditors so that they can trigger the Code under section 7 and have their rightful place on the Committee of Creditors when it comes to making important decisions as to the future of the building construction company, which is the execution of the real estate project in which such home buyers are ultimately to be housed. |
18/45 |
| 3 | Whether Explanation added to section 5(8)(f) is clarificatory or can enlarge the scope? | a. In real estate projects, money is raised from the allottee, against consideration for the time value of money.
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