new delhi jun 6 home buyers will now be recognised as financial creditors under the insolvency law with the government promulgating an ordinance president ram nath kovind has given his assent to promulgate the insolvency and bankruptcy code amendment ordinance 2018 according to an official release the ordinance provides significant relief to home buyers by recognising their status as financial creditors this would give them due representation in the committee of creditors coc and make them an integral part of the decisionmaking process the release said further home buyers would be able to invoke section 7 of the ibc against errant developers section 7 allows financial creditors to file application seeking insolvency resolution process the move also comes at a time when many home buyers are facing hardships on account of delayed and incomplete real estate projectsaccording to the release another major beneficiary would be micro small and medium enterprises msme sector as it would get a special dispensation under the code the immediate benefit it provides is that it does not disqualify the promoter to bid for his enterprise undergoing corporate insolvency resolution process cirp provided he is not a wilful defaulter and does not attract other disqualifications not related to default it also empowers the central government to allow further exemptions or modifications with respect to msme sector if required in public interest it noted on may 23 the cabinet had cleared promulgation of an ordinance to amend the ibc the ordinance also lays down a strict procedure for withdrawal of a case by an applicant after admission under the code such withdrawal would be permissible only with the approval of the coc with 90 per cent of the voting share furthermore such withdrawal will only be permissible before publication of notice inviting expressions of interest eoi the release said according to the release the regulations would bring in further clarity by laying down mandatory timelines processes and procedures for resolution processsome of the specific issues that would be addressed include nonentertainment of late bids no negotiation with the late bidders and a well laid down procedure for maximising value of assets the release said in efforts to encourage resolution rather than liquidation the voting threshold for approval has been reduced to 66 per cent from 75 per cent for all major decisions such as approval of resolution plan and extension of cirp period among others to facilitate the corporate debtor to continue as a going concern during cirp the voting threshold for routine decisions has been reduced to 51 per cent besides the ordinance provides for a mechanism to allow participation of security holders deposit holders and all other classes of financial creditors beyond a certain number to attend the coc meetings through authorised representations taking into account the wide range of disqualifications contained in section 29a of the code the ordinance provides that the resolution applicant shall submit an affidavit certifying its eligibility to bid this places the primary onus on the resolution applicant to