Mixed Outcomes in Real Estate Insolvency: Only 17% Cases Resolved

India’s insolvency framework for real estate is showing mixed outcomes nearly nine years after the rollout of the Insolvency and Bankruptcy Code (IBC), with a large proportion of cases still pending and thousands of homebuyers awaiting closure.

According to a committee report, 553 real estate corporate insolvency resolution processes (CIRPs) had been admitted under the IBC as of September 30, 2025, reflecting the scale of financial stress in the sector and its deep linkages with household savings and housing demand.

Resolution remains limited Of the total cases, only 95 have been successfully resolved, accounting for just over 17% of admitted cases. These resolutions have directly impacted around 1.40 lakh homebuyers, either through delivery of homes, partial recoveries, or alternative relief mechanisms. While these cases demonstrate that the IBC can deliver outcomes, the relatively low resolution rate highlights structural challenges in dealing with real estate insolvency, where project completion—not asset sale—is the primary objective.

Bulk of cases stuck or settled outside IBC A significant 194 cases (35%) have been withdrawn or closed, largely through settlements, appeals, or out-of-court arrangements. This suggests that stakeholders often prefer negotiated resolutions over the formal insolvency route, which is seen as time-consuming and uncertain. Meanwhile, 221 cases (40%) remain ongoing, underlining persistent delays in the system. These pending cases involve approximately 1,08,887 homebuyers, many of whom have been waiting for years for clarity on project completion or refunds.

Liquidation remains a last resort Only 43 cases (8%) have ended in liquidation, reflecting the limited applicability of asset sales in real estate. Liquidation typically involves the sale of land parcels or incomplete structures, often leading to significant value erosion and leaving homebuyers with limited recovery.

Case study: Jaypee Infratech benchmark The resolution of Jaypee Infratech Ltd stands out as the most prominent success under the IBC in real estate. The case involved around 21,000 homebuyers with claims aggregating to nearly ₹12,800 crore. Approved by the National Company Law Tribunal (NCLT) in March 2023, the resolution ensured that all homebuyers would receive possession of their homes—demonstrating that large, complex cases can be resolved effectively with coordinated stakeholder action.

Total impact: Nearly 2.5 lakh homebuyers Overall, the 553 cases have impacted approximately 2,49,087 homebuyers, underscoring the systemic importance of real estate insolvency. This includes: - 1,40,200 homebuyers in resolved cases - 1,08,887 homebuyers in ongoing cases The data highlights the broader socio-economic implications, as each delayed project affects not just financial investments but also housing security for families.

Structural concerns persist The high share of ongoing and withdrawn cases points to key bottlenecks: - Entity-level insolvency trapping viable projects - Lack of reliable cost and project data - Delays in approvals and judicial processes - Funding constraints for project completion

Outlook The data reinforces the need for a project-centric resolution approach, faster approvals, and stronger institutional coordination. While landmark cases like Jaypee Infratech show what is possible, the broader system continues to grapple with delays and uneven outcomes. As reforms are considered, the focus is increasingly shifting from recovery rates to timely completion of housing projects, which remains the ultimate measure of success in real estate insolvency.