NCLT Fails to Revive Stalled Realty Projects: Manohar Lal Calls for System Overhaul
Union Housing and Urban Affairs Minister Manohar Lal criticizes the National Company Law Tribunal (NCLT) for its inability to revive stalled real estate projects, emphasizing the need for system improvements, RERA compliance, and GDP growth.
NcltReal EstateReraGdp GrowthManohar LalReal EstateAug 30, 2025
Addressing the realtors' body, he urged builders to avoid cash dealings in property transactions to ensure the proper growth of the real estate sector, which contributes 8-10 per cent to India's GDP. He also directed the real estate industry to avoid misleading advertisements while marketing their projects.
"Cash dealing is a big problem in the real estate sector," the minister said. The government is making efforts to eliminate cash dealings in property transactions and has asked the industry to do its part. He emphasized the need to align circle rates with market rates to discourage cash transactions.
The minister noted that disputes between builders and consumers have reduced since the enactment of the Real Estate (Regulation and Development) Act (RERA) in 2017. However, there have been instances of fund diversions from escrow accounts without completing construction works. The minister stated he was aware of such cases and the people involved.
Referring to real estate cases under the National Company Law Tribunal (NCLT), Manohar Lal said that banks approach the tribunal in case of defaults by builders in repaying their loans. "NCLT has not been able to improve the system as it was envisaged," the minister said. If a project that could have been saved goes to the NCLT, it is unlikely to be completed, he added.
"This (NCLT) is a government system which I am criticizing. I am doing this with the consent of the Prime Minister," he said. The minister mentioned that a presentation has been prepared in consultation with the Corporate Affairs ministry and will soon be presented to the Prime Minister. "We need to correct the system, and if we do it together, it will be better," he said.
Lal also addressed delays in approvals for project development, urging NAREDCO to write to state governments for ease of doing business and faster approval systems. He suggested that best practices from one state should be replicated by others. He highlighted that the Haryana government, when he was the Chief Minister, adopted a single-window clearance system and launched schemes for stalled projects due to the COVID-19 pandemic.
The minister noted the significant role of the real estate sector in the country's progress, contributing 8-10 per cent to the country's GDP. He emphasized the need to increase this share to 18 per cent by 2047. The country is growing rapidly under the leadership of Prime Minister Narendra Modi, he said.
He highlighted that the country's GDP growth stood at 7.8 per cent in the April-June quarter of this fiscal year, despite concerns about the adverse impact of a 50 per cent tariff imposed by the United States. The high growth rate, he asserted, will silence those countries that have doubts about India's growth potential.
The minister also mentioned the significant improvements in infrastructure over the last 11 years of the Modi government. Talking about metro rail expansion, he said India is currently ranked third globally in metro rail with 1,036 km operational. The country will soon surpass the US to become the second largest, with around 900 km of metro rail under construction. He also spoke about providing last-mile connectivity to people traveling by the metro rail network.
Frequently Asked Questions
What is the main criticism of the NCLT by Manohar Lal?
Manohar Lal criticizes the NCLT for failing to deliver the desired results in reviving stalled real estate projects, which often leads to projects being left incomplete.
Why does Manohar Lal emphasize the need to avoid cash dealings in property transactions?
Cash dealings in property transactions are a significant problem in the real estate sector. Manohar Lal emphasizes the need to eliminate cash dealings to ensure the proper growth of the sector and to align circle rates with market rates.
What is the role of RERA in the real estate sector?
The Real Estate (Regulation and Development) Act (RERA) was enacted in 2017 to regulate the real estate sector, reduce disputes between builders and consumers, and ensure transparency and accountability in property transactions.
What steps are being taken to improve the real estate sector's contribution to GDP?
Steps include aligning circle rates with market rates, improving infrastructure, and increasing the sector's share in GDP from 8-10 per cent to 18 per cent by 2047. The government is also working to eliminate cash dealings and improve the approval process for project development.
What is the current status of metro rail expansion in India?
India is currently ranked third globally in metro rail with 1,036 km operational. The country will soon surpass the US to become the second largest, with around 900 km of metro rail under construction. Efforts are also being made to provide last-mile connectivity to people traveling by the metro rail network.
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