Homebuyers in a Builder Insolvency: Choosing, Replacing and Instructing Your Representative

In a large Bengaluru project that slides into insolvency, hundreds or even thousands of flat buyers become creditors overnight. They do not each get a seat at the table. Instead, the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, as amended up to 30 October 2026, give them one voice in the committee of creditors: an authorised representative chosen from three names, paid per meeting, and bound to vote as the buyers instruct.

This guide explains how that representative is chosen, how homebuyers can replace them, how votes are cast, and when large groups of buyers can ask for facilitators. It is general information on the regulations, not advice on any case.

The short answer. The interim resolution professional identifies three insolvency professionals and offers them in the public announcement; the one chosen by the highest number of financial creditors in the class becomes the authorised representative, subject to the Adjudicating Authority's appointment. Buyers holding at least 10 per cent of the class's voting share can seek replacement. The representative circulates minutes, opens a voting window of at least twelve hours, and votes as instructed; where the Code's majority rule applies, the vote follows more than 50 per cent of the voting share of those who voted. Where a class has more than 1,000 creditors, up to five facilitators can be appointed for sub-classes of at least 100. The trade-off: one representative makes a large group of buyers workable in the committee, but buyers who do not read the agenda or send instructions in the window have little say.

How is the homebuyers' authorised representative chosen?

From three names in the public announcement. Regulation 4A(2) says the interim resolution professional shall identify three insolvency professionals who are not their relatives or related parties, and who have addresses registered with the Board in the State or Union Territory with the highest number of creditors in the class, or a nearby one if there are not enough. Regulation 6(2)(bb) says the public announcement shall offer that choice of three, with a link to brief profiles and a note on the representative's role and duties.

Regulation 16A(1) says the interim resolution professional "shall select the insolvency professional, who is the choice of the highest number of financial creditors in the class" in the claim form. A choice made in a form received after the time stipulated in the public announcement "shall not be considered." Where the builder has only creditors in a class and no other financial creditor eligible to join the committee, regulation 16B says the committee "shall consist of only the authorised representative(s)." Regulation 16A(2) requires the interim resolution professional to apply to the Adjudicating Authority for appointment within two days of verifying claims, and the selected professional acts as interim representative in the meantime.

Can homebuyers replace their representative?

Yes, with enough support. Regulation 16A(3A) says financial creditors in the class "representing not less than ten per cent. voting share may seek replacement of the authorised representative with an insolvency professional of their choice." The request is circulated to the class with a voting window open for at least twenty-four hours.

Under 16A(3B), the class is offered a choice of at least three insolvency professionals, including those proposed and the existing representative. Regulation 16A(3C) says the resolution professional shall apply to the Adjudicating Authority to appoint the one "who receives the highest percentage of voting share of financial creditors in that class."

How are homebuyers' votes counted?

By financial debt, through the representative. Regulation 16A(7) says the voting share of a creditor in a class "shall be in proportion to the financial debt which includes an interest at the rate of eight per cent per annum unless a different rate has been agreed to between the parties." Regulation 25A says the representative casts votes in accordance with sub-section (3) or (3A) of section 25A of the Code.

Section 25A(3) of the Insolvency and Bankruptcy Code, 2016 says the representative shall vote for each financial creditor in accordance with that creditor's instructions, and shall abstain for a creditor who gives no prior instructions. Section 25A(3A) says that for a representative of a class under section 21(6A), the vote is cast on behalf of all the creditors represented "in accordance with the decision taken by a vote of more than fifty per cent. of the voting share of the financial creditors he represents, who have cast their vote," with a carve-out for withdrawal applications under section 12A.

Timing is set by regulation 25(6): the representative shall circulate the committee minutes to the class and "announce the voting window at least twenty-four hours before the window opens for voting instructions and keep the voting window open for at least twelve hours." Regulation 16A(9) also lets the representative seek preliminary views on the agenda, but says those views "shall not be considered as voting instructions."

What must the representative do for homebuyers?

Inform, consult and represent. Regulation 16A(10) lists the duties, including to help the class understand committee discussions, review minutes, assist in evaluating resolution plans, make sure the class has access to the information needed to form an opinion, "update regularly the creditors in a class he represents on the progress," suggest plan modifications the class wants, record minutes of class meetings, and represent the class before the Adjudicating Authority, the National Company Law Appellate Tribunal and other regulators.

The resolution professional has duties that support this. Under regulation 16A(4) to (6), the representative must be given the list of creditors in the class and updated lists as they change, and the resolution professional "shall provide electronic means of communication between the authorised representative and the creditors in the class."

The representative is paid from the process costs. Regulation 16A(8) sets a fee for each committee meeting attended of Rs 30,000 for a class of 10 to 100 creditors, Rs 40,000 for 101 to 1,000 and Rs 50,000 for more than 1,000, and a fee for each meeting of the class convened of Rs 10,000, Rs 12,000 and Rs 15,000 respectively. Fees for two class meetings per committee meeting are process costs; further meetings need the committee's approval.

There are limits too. The clarification under regulation 16A(5) says the representative "shall have no role in receipt or verification of claims" of the class. Claim admission is for the resolution professional, and our guide to IBBI's 30 October 2026 rules for stalled projects covers what the resolution professional must now track for each project.

When can homebuyers ask for facilitators?

When the class is very large. Regulation 16C(1) says where the number of creditors in a class exceeds one thousand, the committee may direct the appointment of a facilitator for a sub-class, other than the resolution professional and the representative. It is considered only if, after the first committee meeting, a sub-class of at least one hundred creditors requests an agenda item for it, with the proposed facilitator's name.

The total number of facilitators "shall not exceed five," and each facilitator's fee is twenty per cent of the representative's fee, paid as insolvency resolution process cost. A majority of the sub-class can recommend replacing a facilitator under 16C(2). Regulation 16D says a facilitator's role includes facilitating communication between the representative and the sub-class, attending committee meetings as an observer, and providing information and clarifications to the sub-class as per the representative's advice.

What should a Bengaluru homebuyer do to make their vote count?

Treat the process like a series of deadlines. Our guide to homebuyers' position if a builder goes into liquidation explains why the resolution stage matters. Then use this list:

1. Read the public announcement and the profiles of the three proposed representatives.
2. Indicate your choice of representative in the claim form and submit it before the stated deadline.
3. Keep your email and mobile details current with the representative so you receive agendas and minutes.
4. Read the minutes and send voting instructions within the window, which must stay open at least twelve hours.
5. Use the preliminary views window to raise concerns early, knowing those views are not votes.
6. If the representative is not serving the class, gather support from at least 10 per cent of voting share to seek replacement.
7. In a class of more than 1,000, organise a sub-class of at least 100 if you want a facilitator.

Frequently asked questions

How is the authorised representative for homebuyers chosen?

The interim resolution professional offers three insolvency professionals in the public announcement. Under regulation 16A(1), the one chosen by the highest number of financial creditors in the class in their claim forms is selected, and a choice in a form received after the stipulated time is not considered.

Can homebuyers replace their authorised representative?

Yes. Regulation 16A(3A) lets creditors in the class representing at least ten per cent of voting share seek replacement. The class is offered at least three choices, and the professional receiving the highest percentage of voting share is proposed for appointment by the Adjudicating Authority.

How long is the voting window for homebuyers?

Regulation 25(6) says the authorised representative shall circulate the minutes, announce the voting window at least twenty-four hours before it opens for voting instructions, and keep it open for at least twelve hours. Preliminary views on the agenda are not treated as voting instructions.

When can facilitators be appointed for homebuyers?

Under regulation 16C, where a class has more than one thousand creditors, the committee may direct appointment of a facilitator for a sub-class if at least one hundred creditors request it after the first meeting. There can be no more than five facilitators.

This article explains the IBBI CIRP Regulations and the Insolvency and Bankruptcy Code for information only and is not legal advice. Each insolvency is governed by its public announcement and the Adjudicating Authority's orders.

Last updated 2026-11-10. PropNewz Team.