A Homebuyer-Focused Analysis of the Legal Developments Surrounding Real Estate Insolvency

Author

Naavya Dixit,Deepanshu Soni


Abstract

 This paper examines the evolution of India's real estate insolvency framework through a homebuyer-specific lens. It is argued that the Insolvency and Bankruptcy Code, 2016 is gradually transforming from a creditor-driven regime into a sector-specific mechanism. The paper traces how legislative amendments and judicial pronouncement have consistently opened new doors for homebuyers, changing their status to financial creditors while simultaneously cautioning against misuse through speculative investors. It is contended that recent developments such as project-wise insolvency, exclusion of speculative investors, regulated participation of Resident Welfare Associations, and the statutory recognition of possession as a remedy, underscore a conscious shift towards resolution over recovery, especially in the real estate sector. It is further argued that while these reforms seek to balance creditor autonomy and paramountcy with the constitutional right to shelter, there are still gaps that are yet to be addressed. In this light, the regime of real estate insolvency is analysed in depth, followed by certain suggestions aimed at further strengthening the legal framework.


Keywords

• Insolvency and Bankruptcy Code (IBC), Real Estate Regulation and Development Act (RERA), Corporate Insolvency Resolution Process (CIRP)



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References


Sr. No.

Authority

Legislations and Statutes

1. 

Insolvency and Bankruptcy Code, 2016 (31 of 2016).

2. 

Consumer Protection Act, 2019 (35 of 2019).

3. 

Real Estate (Regulation and Development) Act, 2016 (16 of 2016).

4. 

Insolvency and Bankruptcy (Second Amendment) Act, 2018.

5. 

Insolvency and Bankruptcy (Amendment) Act, 2020.

6. 

IBBI CIRP (Third Amendment) Regulations, 2019.

7. 

IBBI CIRP (Amendment) Regulations, 2024.

8. 

IBBI CIRP (Amendment) Regulations, 2025.

9. 

IBBI CIRP (Fourth Amendment) Regulations, 2025.

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10. 

Insolvency Law Committee, Report of the Insolvency Law Committee, March 2018.

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11. 

Nikhil Mehta & Sons v. AMR Infrastructure (2018) 2 Comp Cas-OL 88.

12. 

Anil Mahindroo & Anr v Earth Organics Infrastructure 2017 SCC OnLine NCLAT 216.

13. 

Col. Vinod Awasthy v AMR Infrastructure Ltd., CP No. (IB)-10(PB)/2017 (NCLT, Principal Bench).

14. 

Chitra Sharma v Union of India & Ors., (2018) 18 SCC 575

15. 

Pioneer Urban Land and Infrastructure Ltd. v Union of India, (2019) 8 SCC 416

16. 

Mansi Brar Fernandez v Shubha Sharma, 2025 INSC 1110

17. 

Vishal Chelani v Debashis Nanda, (2023) 10 SCC 395

18. 

Elegna Coop. Housing & Commercial Society Ltd. v Edelweiss Asset Reconstruction Co. Ltd., 2026 SCC OnLine SC 82

19. 

GLAS Trust Co. LLC v BYJU Raveendran, (2025) 3 SCC 625

20. 

Flat Buyers Assn. v Umang Realtech, (2020) 12 Comp Cas-OL 174

21. 

Indiabulls Asset Reconstruction Co. Ltd. v Ram Kishore Arora, 2023 SCC OnLine SC 612

22. 

Gagan Tandon v IL & FS Financial Services Ltd., 2026 SCC OnLine NCLAT 16

23. 

Amit Nehra v Pawan Kumar Garg, 2025 SCC OnLine SC 1941

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24. 

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https://corporate.cyrilamarchandblogs.com/2025/03/latest-reforms-in-real-estate-cirp-strengthening-the-position-of-homebuyers/ 

25. 

The Mansi Brar Judgment – Reaffirming the Pioneer Principle and a push towards crucial reforms in real estate insolvency (CAM)

https://corporate.cyrilamarchandblogs.com/2025/09/the-mansi-brar-judgment-reaffirming-the-pioneer-principle-and-a-push-towards-crucial-reforms-in-real-estate-insolvency/ 

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https://ibbi.gov.in/uploads/resources/86c56558be154749bc585af248ec94cb.pdf 

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Homebuyers’ society, RWAs can’t intervene in insolvency proceedings against developer: Supreme Court (Bar and Bench)

https://www.barandbench.com/news/litigation/homebuyers-society-rwas-cant-intervene-in-insolvency-proceedings-against-developer-supreme-court 

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https://ibclaw.in/resolving-real-estate-insolvency-safeguarding-homebuyers-interests-while-ensuring-project-completion-by-adv-navya-shekhar/ 

 

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