CIRP Regulations under the 2025 Amendments

IBBI has introduced the new Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2025 that involves altering and amending certain provisions of the Insolvency and Bankruptcy Board of India CIRP Regulations. Putting emphasis once again on CIRP of real estate developers, these regulations make a point to deal with it. Another set of amendments seeking to resolve several issues obstructing real estate CIRPs is the 2025 Amendments. These include measures to more easily allow allottees to submit resolution plans and transfer possession in the interim to protect their rights while empowering them to actively participate in accelerating the completion of real estate projects¹.

Key Amendments:

The recent amendments introduce various aspects that may cause impact in the field of real estate and those are:

• Transfer of Ownership: Regulation 4E was introduced into the CIRP Regulations under the 2025 Amendments to empower resolution professionals with regard to real estate cases to transfer the ownership of an individual plot, apartment, or building to the allottees of a real estate project during the course of the resolution subject to such resolution being approved by at least 66 % of the vote of the Committee of Creditors (“CoC”).
• Appointing Facilitators: The CoC may appoint facilitators for subclasses within large creditor classes, or classes with more than 1,000 creditors, as per the 2025 Amendments. These facilitators may be any individual other than the resolution professional along with interim resolution professional or an authorized representative designated under the IBC provided that no more than five facilitators are chosen overall.
• Competent Authority Involvement in Real Estate Projects: The CoC does not include land authorities, who are typically operational creditors. The IBBI in its earlier discussion papers, observed that the lack of representation of land authorities on the CoC often translated into their views being insufficiently taken into account in land-related matters and requirements which eventually made the actual implementation of resolution plans more difficult. Taking into consideration that land authorities’ input can indeed assist in the eventual feasibility and viability of resolution plans from a regulatory standpoint, the 2025 Amendments certainly ensure that now land authorities have a formal mechanism to voice their concerns and suggestions to the CoC, albeit financial creditors still retain the ultimate say in decision-making under the CoC. The 2025 Amendments allow the CoC to relax the conditions on the ability of associations or groups of homebuyers to apply for resolution in the CIRP provided that they represent at least 10% of all creditors in a class, or 100 creditors, whichever is fewer.

Conclusion:

Therefore, introducing land authorities in the CIRP process can only reduce the regulatory hurdles that have been a traditional block to real estate CIRPs. Along the same lines, it is very fortunate that RPs are required to report upon the development rights and permissions concerning the real estate projects that are insolvent, which will give the CoC a handle on the barriers to implementation.