Lucknow, May 26 (IANS): Real estate developers in Uttar Pradesh are now seeking protection from insolvency proceedings for at least a year since the sector had been severely hit financially due to the pandemic.

R.K. Arora, state president of National Real Estate Development Council, said, "Section 7 of Indian Bankruptcy Code (IBC) allows a financial creditor to file for initiating the corporate insolvency resolution process against a corporate debtor. Section 9 provides for application of insolvency by an operational creditor, while Section 10 is for initiation of insolvency proceedings by a corporate applicant. We have requested that applicability of these three sections be suspended for a year like it was done in 2020, in view of the pandemic."

They have also written to the Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) seeking more time to repay loans.

"We request UP RERA and the government of India to extend this relief further because the second wave of Covid-9 has further ruined the business with most of our sales staff, construction works and others falling ill and affecting projects. Besides we seek a moratorium of one year for business loans in view of the pandemic," said Arora.

According to a major real estate developer, who spoke on condition of anonymity, "Real estate business has been worst hit in the pandemic. Most of the project have been stalled and buyers are even backing out from the bookings. Moreover, just when the market saw hope of revival earlier this year, the second wave of the pandemic arrived. We are not sure when we can hope for a revival now."