Supreme Court Ruling on Housing Rights: A New Era for Real Estate
The Supreme Court's recent ruling, declaring housing a fundamental right, has set the stage for significant reforms in the real estate sector. Developers and legal experts welcome the move, emphasizing the need for a multi-stakeholder approach to systemic reforms.
Supreme CourtReal EstateHousing RightsIbcReraReal Estate NewsSep 14, 2025
The apex court on Friday cited housing as a fundamental right under Article 21 of the Constitution in its ruling on a batch of appeals arising out of a National Company Law Appellate Tribunal (NCLAT) decision on a housing project in Greater Noida. Stating that housing is neither a luxury nor a speculative instrument but a fundamental human need, a two-judge bench of justices J B Pardiwala and R Mahadevan issued 12 binding directions.
These directions include asking authorities to frame specific guidelines for insolvency proceedings in real estate, with timelines for project-wise corporate insolvency resolution processes (CIRPs) and safeguards for allottees. Abhishek A Rastogi, founder of Rastogi Chambers, said the judgment provides much-needed doctrinal clarity by carving out speculative investors from genuine homebuyers under the IBC framework.
“The way forward now lies in a fact-sensitive application of this principle so that bona fide buyers, who often sign builder-dictated agreements, are not unfairly excluded,” he added. The court also directed the government to fill vacancies in the National Company Law Tribunal (NCLT), NCLAT, and state Real Estate Regulatory Authority (Rera) bodies on a war footing, along with constituting dedicated IBC benches with additional strength.
Sujay Kalele, founder and managing director of TRU Realty, said the court’s directions to fill vacancies in Rera and NCLT will cut down delays and systemic bottlenecks that have long penalised honest developers. “With over 412,000 new housing units launched across the top seven Indian cities in 2024, buyers’ demand remains robust, but regulatory gaps and stalled projects continue to pose challenges, making these reforms both urgent and necessary,” he added.
The government has also been asked to file a compliance report within three months on measures taken to upgrade NCLT and NCLAT infrastructure nationwide. While developers welcomed the move, they demanded that stakeholders be involved in policy improvements. Tarun Bhatia, vice-chairman of NAR India, said any improvements to the Rera Act or related policies must be developed in active partnership with the industry, bringing together developers, realtors, homebuyer associations, financial institutions, legal experts, and regulators.
“Such collaborations will be key to ensuring reforms are both practical and future ready, striking the right balance between consumer protection and ease of doing business,” he said. To this end, the Centre has been tasked with creating a committee within three months to suggest commercially viable systemic reforms. The committee, chaired by a retired High Court judge, will include representatives from the law and housing ministries, domain experts in real estate, finance and IBC, and two eminent industry members.
Experts said the implications of this ruling are twofold: safeguarding the integrity of the IBC as a collective resolution mechanism and reaffirming housing as a constitutional right. Kushagr Ansal, director of Ansal Housing, said that protecting homebuyers’ interests, ensuring timely project completion, and strengthening Rera will restore trust and confidence in housing as a fundamental right.
Salil Kumar, director for marketing and business management at CRC Group, said the measures will improve transparency, accelerate delivery, and strengthen buyer confidence, laying the foundation for sustainable growth. Rastogi cautioned that consistent application by NCLTs and coordination with Rera will be critical to ensure the balance struck by the court translates into real protection for stakeholders.
Calling the ruling a significant step for India’s housing market, G Hari Babu, National President of Naredco, said project-wise insolvency proceedings and escrow accounts for early-stage projects will safeguard homebuyers’ investments while curbing speculative practices that have delayed many developments. “Technology-led practices such as digital escrow tracking, online project monitoring, and transparent disclosure systems will play a vital role in implementing the court’s vision. It will also boost global investor confidence,” Kalele added.
Developers also welcomed the decision to consider establishing a revival fund under the National Asset Reconstruction Company Limited (NARCL) or expanding the Special Window for Affordable and Mid-Income Housing (SWAMIH) fund to provide bridge financing for stressed projects under insolvency. “The directives to enhance last-mile funding, consider revival funds, and undertake systemic reforms across the sector are expected to revive stalled projects, improve accountability, and accelerate the delivery of affordable and mid-income housing,” Babu said.
Frequently Asked Questions
What is the main outcome of the Supreme Court's ruling on housing rights?
The Supreme Court declared housing a fundamental right under Article 21 of the Constitution and issued 12 binding directions to protect homebuyers' interests, including specific guidelines for insolvency proceedings in real estate.
What are the key directions issued by the Supreme Court?
The key directions include framing specific guidelines for insolvency proceedings, timelines for project-wise corporate insolvency resolution processes, and safeguards for allottees. The court also directed the government to fill vacancies in NCLT, NCLAT, and Rera bodies.
How will these reforms benefit homebuyers?
These reforms will protect homebuyers' investments, ensure timely project completion, and strengthen the Real Estate Regulatory Authority (Rera), thereby restoring trust and confidence in the housing market.
What is the role of technology in implementing the court's vision?
Technology-led practices such as digital escrow tracking, online project monitoring, and transparent disclosure systems will play a vital role in implementing the court’s vision and boosting global investor confidence.
What are the next steps for the government in response to this ruling?
The government has been directed to file a compliance report within three months on measures taken to upgrade NCLT and NCLAT infrastructure nationwide and to create a committee to suggest commercially viable systemic reforms.
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