Supreme Court Urges Centre to Act on Stalled Housing Projects
The Supreme Court has called on the Centre to take proactive steps to address the mounting issues of stalled housing projects, urging the government to consider establishing a revival fund and taking over such projects to protect homebuyers' interests.
Supreme CourtReal EstateStalled Housing ProjectsRevival FundHomebuyersReal EstateSep 13, 2025
A bench of Justices J B Pardiwala and R Mahadevan observed that the right to housing is not only a contractual entitlement but also a part of the fundamental right to life. The bench highlighted the state's constitutional obligation to ensure that the dreams of citizens to own a home do not turn into a lifelong nightmare.
Call for Revival Fund
The court asked the Union government to consider establishing a revival fund under the National Asset Reconstruction Company Ltd (NARCL) or by expanding the SWAMIH Fund to support stalled projects.
“The Union government shall consider establishing a revival fund under NARCL or expanding the SWAMIH Fund, to provide bridge financing for stressed projects undergoing CIRP, thereby preventing liquidation of viable projects and safeguarding homebuyer interests. Under SWAMIH Fund initiative, every rupee must be utilized strictly for its intended purpose of last-mile financing. To prevent misuse, we direct that a comprehensive periodic performance audit by the CAG be carried out,” the bench said.
Framework Against Exploitation
The court emphasized that the state must create and strictly enforce a framework to prevent developers from defrauding or exploiting homebuyers.
“The State carries a constitutional obligation to create and strictly enforce a framework wherein no developer is permitted to defraud or exploit homebuyers. Ensuring timely project completion must be a cornerstone of India's urban policy. Equally, the State must proactively address the menace of a parallel cash economy and speculative practices in the real estate market, which artificially inflate housing costs and enable 'trigger-happy' investors seeking easy exits to jeopardize the interests of genuine end-users,” the bench said.
Insolvency-Linked Projects
With an increasing number of real estate projects entering insolvency proceedings, the bench suggested that the Centre may consider setting up a body corporate to identify, take over, and complete stalled projects. Such a body could be modeled on NARCL or formed through public-private partnerships with construction-focused public sector units.
Protecting Homebuyers’ Rights
The court emphasized that owning a home is more than just having a roof overhead, as it reflects a person’s hopes and aspirations.
“The plight of tax-paying middle-class citizens paints a disheartening picture. Having invested their lifelong savings in pursuit of a home, many are compelled to shoulder a double burden - servicing EMIs on one hand, and paying rent on the other - only to find their dream home reduced to an unfinished building. In some cases, construction has not even commenced despite full or substantial payment,” it said.
The bench concluded that the government must safeguard the interests of homebuyers and prevent their investments from being eroded in stalled and abandoned projects.
Frequently Asked Questions
What is the Supreme Court's stance on stalled housing projects?
The Supreme Court has urged the Centre to take proactive steps to address the issues of stalled housing projects, emphasizing the need to protect homebuyers' interests and ensure timely project completion.
What is the SWAMIH Fund?
The SWAMIH Fund is a financial initiative aimed at providing last-mile financing for stressed housing projects, helping to prevent their liquidation and safeguarding the interests of homebuyers.
Why is the right to housing considered a fundamental right?
The right to housing is considered a fundamental right as it is essential for the dignity and well-being of individuals, reflecting their hopes and aspirations for a stable and secure life.
What measures has the court suggested to prevent developers from defrauding homebuyers?
The court has suggested that the state must create and strictly enforce a framework to prevent developers from defrauding or exploiting homebuyers, ensuring timely project completion and addressing speculative practices in the real estate market.
How can the government assist in completing stalled projects?
The government can assist in completing stalled projects by establishing a revival fund under NARCL or expanding the SWAMIH Fund, providing bridge financing for stressed projects undergoing CIRP, and considering the formation of a body corporate to take over and complete such projects.
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