The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has issued an important advisory to thousands of homebuyers after the National Company Law Tribunal (NCLT) admitted 14 real-estate developers, covering 129 ongoing projects, into the Corporate Insolvency Resolution Process (CIRP) between January 2024 and the present.
With these admissions, NCLT now becomes the sole authority empowered to decide all matters related to these projects. As a result, UP RERA has instructed allottees to submit their claims only through the Insolvency Resolution Professionals (IRPs) appointed under the Insolvency and Bankruptcy Code (IBC).
Impact of IBC Moratorium on RERA Proceedings
Once NCLT admits a project under CIRP, Section 14 of the IBC automatically imposes a moratorium, which has major consequences for homebuyers and RERA complaints.
This moratorium leads to:
• Suspension of all regulatory actions
• Halt on all ongoing or future RERA complaints
• Stay on enforcement orders and hearings
• No recovery actions against the developer
UP RERA clarified that until the moratorium is lifted, it cannot entertain or process any complaint, order, or hearing for these 129 projects. Homebuyers must now route all grievances through the CIRP system.
Rights of Homebuyers Under CIRP
UP RERA emphasised that homebuyers’ rights remain protected under IBC, but they must be exercised through the IRP handling the insolvency. All claims must be submitted according to IBC procedures to ensure that buyers are recognised as financial creditors in the insolvency process.
What Homebuyers Should Do Now
UP RERA has strongly advised affected homebuyers to take immediate steps as follows:
1) File Claims Without Delay
Buyers must urgently submit their claims using IBBI/NCLT-prescribed formats, including Form CA and other applicable forms. Delayed submission can impact recognition in the Committee of Creditors (CoC).
2) Communicate Regularly With the IRP
Allottees must stay in contact with the Insolvency Resolution Professional, who will be the primary authority providing updates, instructions, and communication related to CIRP progress.
3) Track CIRP Progress Closely
Buyers should keep track of all updates regarding:
• CIRP stages
• CoC meetings
• Invitation of resolution plans
• NCLT orders and directions
These updates determine whether the project will undergo resolution, revival, or liquidation.
RERA’s Appeal to Homebuyers: Act Fast
UP RERA has reiterated that timely claim filing is critical. If homebuyers fail to submit their claims in time, their stake in the CIRP may not be properly acknowledged, reducing their chances of recovery or possession.
With the IBC moratorium in place, RERA remains barred from intervention, making IRPs and NCLT the only valid channels for updates and actions.
Why This Advisory Matters
This development marks one of the largest waves of real estate insolvencies in recent years. More importantly:
• It protects homebuyers’ rights by bringing them under the financial creditor category
• It clarifies that RERA cannot override IBC once CIRP begins
• It guides buyers on how to safeguard their claims during insolvency
Homebuyers affected by these 129 projects must act quickly to ensure full participation in the resolution process.
