Supreme Court Upholds Right to Secure and Timely Possession of One’s Home
The Supreme Court has ruled that the right to secure, peaceful, and timely possession of one’s home is a fundamental right under Article 21 of the Constitution. This judgment emphasizes the need to protect genuine homebuyers from speculative practices in the real estate market.
Fundamental RightReal EstateHomebuyersSpeculative PracticesArticle 21Real Estate NewsSep 13, 2025
The two-judge bench, comprising Justice J.B. Pardiwala and Justice R. Mahadevan, emphasized that home-buying cannot be treated as a mere commercial transaction or speculative instrument. They stated, “Housing is neither a luxury nor a commodity for speculation – it is a fundamental human need. The right to secure, peaceful, and timely possession of one’s home is therefore a facet of the fundamental right to shelter under Article 21.”
The Court reiterated that the right to social and economic justice, including the right to shelter, is a fundamental right encompassed within the right to life. This decision underscores the constitutional obligation of the State to protect homebuyers and ensure access to adequate housing, especially for weaker sections.
In the lead case, the appellant was a homebuyer/financial creditor. The NCLAT had reversed the admission of the application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC), ruling that she was a “speculative investor” rather than a genuine homebuyer/financial creditor. The NCLAT made a similar decision in another case, setting aside the admission of a Section 7 application on the grounds that the appellant was a speculative buyer seeking to profit from a lucrative agreement.
The Supreme Court noted the critical role of the residential real estate sector in the Indian economy. It is closely linked to banking, steel, cement, and allied industries, and is one of the largest employment generators. Despite robust demand, the sector has been plagued by delays, defaults, and lack of accountability, leaving countless families without possession of their homes despite significant investments.
The Court reiterated that the IBC is not a recovery mechanism or a bargaining chip for individual disputes but a collective mechanism intended to revive viable projects and safeguard the fundamental right to shelter of genuine homebuyers. It emphasized the following settled principles:
- RERA (Real Estate Regulatory Authority) remains the primary forum for redressal of homebuyers’ grievances.
- The IBC is a forum of last resort, intended to secure revival and completion of viable projects, not to serve as a debt recovery mechanism.
- Consumer forums should confine themselves to adjudicating individual service deficiencies, avoiding conflicting or overlapping orders across multiple fora.
The Court stressed the importance of adhering to IBC timelines and settled precedent to achieve two complementary objectives: ensuring the revival and completion of stalled projects for genuine homebuyers and curbing speculative activity, which has been a “slow poison” for the residential real estate sector and the Indian middle class.
The Court defined a “speculator” as one who practices speculation in trade or business, characterized by the expectation of unusually high profits and activity in the nature of business or trade. The determination of whether an allottee is a speculative investor must be holistic, considering the terms of the agreement, the allotment letter, payment terms, and the overall conduct of the allottee.
The Court clarified that the distinction between speculative investors and genuine homebuyers is relevant only at the stage of initiating the Corporate Insolvency Resolution Process (CIRP). Such allottees are not barred from filing claims for the principal amount invested or pursuing remedies before other fora in accordance with the law.
The Court affirmed the NCLAT’s findings, treating the appellants as speculative investors, and upheld the orders setting aside the admission of the Section 7 applications. However, it reserved the appellants’ liberty to pursue their remedies before appropriate fora, without the bar of limitation.
The Court reiterated that the Right to Shelter is an integral part of the right to life under Article 21, casting a corresponding duty on the State to ensure access to adequate housing, particularly for weaker sections. Various welfare schemes, such as the Pradhan Mantri Awas Yojana (PMAY), have been initiated to provide affordable housing. A home is more than just a roof over one’s head; it is a reflection of one’s hopes and dreams, a safe space for a family, and a refuge from the world’s worries.
The plight of middle-class citizens, who have invested their life savings in pursuit of a home, is disheartening. Many are compelled to shoulder a double burden—servicing EMIs and paying rent—only to find their “dream home” reduced to an unfinished building. The anxiety of not having a home despite paying a fortune takes a serious toll on health, productivity, and dignity.
The Court emphasized that the State must create and strictly enforce a framework to prevent developers from defrauding or exploiting homebuyers. Ensuring timely project completion must be a cornerstone of India’s urban policy. The State must also address the menace of a parallel cash economy and speculative practices in the real estate market, which artificially inflate housing costs and jeopardize the interests of genuine end-users.
The Court suggested several ideas for future reform, including:
1. The IBBI (Insolvency and Bankruptcy Board of India) may introduce “Basel-like” early warning frameworks, drawing from comparative practices such as pre-bankruptcy mediation and preventive restructuring.
2. The Union Government should undertake a consultative exercise to bring about uniformity in RERA Rules across States.
3. Housing Boards, State-level Urban Development Authorities, and CPSUs should establish dedicated wings to revive and complete stalled projects under IBC mechanisms.
4. Collaboration with Indian think tanks and academic institutions should be strengthened to build indigenous capacity for sectoral restructuring.
5. The Union Government may consider establishing a body corporate, similar to NARCL, to identify, take over, and complete stalled projects under the IBC framework.
The Court concluded that the Government is constitutionally obliged to protect the interests of homebuyers and the economy at large. The right to housing is not merely a contractual entitlement but a facet of the fundamental right to life under Article 21. Genuine homebuyers represent the backbone of India’s urban future, and their protection lies at the intersection of constitutional obligation and economic policy. Through these directions, the Court seeks to restore faith in the regulatory and insolvency framework, deter speculative misuse, and ensure that the “dream home” of India’s citizens does not turn into a lifelong nightmare.
Accordingly, the Supreme Court disposed of the Appeals, affirmed the NCLAT’s findings, and directed the Registry to circulate a copy of the Judgment to the Cabinet Secretary to the Government of India as well as to the Chief Secretaries of all States, who shall take necessary steps at the earliest.
Frequently Asked Questions
What is the fundamental right to shelter under Article 21?
The fundamental right to shelter under Article 21 of the Constitution of India is a part of the right to life. It ensures that every individual has the right to secure, peaceful, and timely possession of their home, which is essential for their well-being and dignity.
What is the role of RERA in protecting homebuyers?
RERA (Real Estate Regulatory Authority) is the primary forum for redressal of homebuyers’ grievances. It ensures that developers adhere to regulations and provides a mechanism for homebuyers to seek redressal for any issues they face.
How does the IBC protect genuine homebuyers?
The Insolvency and Bankruptcy Code (IBC) is a collective mechanism intended to revive viable projects and ensure the timely completion of stalled projects for the benefit of genuine homebuyers. It is not a recovery mechanism for individual disputes.
What defines a speculative investor in the real estate market?
A speculative investor in the real estate market is someone who practices speculation in trade or business, characterized by the expectation of unusually high profits and activity in the nature of business or trade. They are not genuine homebuyers who intend to occupy the property.
What suggestions did the Supreme Court make for future reforms in the real estate sector?
The Supreme Court suggested several ideas for future reform, including introducing early warning frameworks, bringing uniformity in RERA Rules, establishing dedicated wings to revive stalled projects, strengthening collaboration with academic institutions, and setting up a body corporate to identify and complete stalled projects.
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