Supreme Court Urges Centre to Act on Stalled Housing Projects and Protect Homebuyers
The Supreme Court has called on the Centre to take proactive measures to support stalled housing projects and protect the rights of homebuyers. The court emphasized the constitutional obligation to ensure that the dream of owning a home does not turn into a nightmare.
Supreme CourtHousing ProjectsHomebuyers RightsReal EstateRevival FundReal Estate NewsSep 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 part of the fundamental right to life. The bench emphasized that the state carries a constitutional obligation to ensure that the dreams of citizens to own a home do not turn into a lifelong nightmare.
The court called for the establishment of 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,” the bench stated.
To ensure the effective use of funds, the court directed that a comprehensive periodic performance audit by the Comptroller and Auditor General (CAG) be carried out. “Every rupee must be utilised 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 added.
The court also emphasized the need for a strict 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 jeopardise the interests of genuine end-users,” the bench said.
With an increasing number of real estate projects entering insolvency proceedings, the bench suggested that the Centre consider setting up a body corporate to identify, take over, and complete stalled projects. Such a body could be modelled on NARCL or formed through public-private partnerships with construction-focused public sector units.
The court highlighted the importance of owning a home, stating that it is more than just having a roof overhead. “Owning a home is a reflection of 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,” the bench noted.
The bench concluded that the government must take proactive measures to safeguard the interests of homebuyers and prevent their investments from being eroded in stalled and abandoned projects. This call to action is a significant step towards addressing the ongoing issues in the real estate sector and ensuring the well-being of homebuyers.
Frequently Asked Questions
What did the Supreme Court say about the government's role in stalled housing projects?
The Supreme Court stated that the government cannot remain a silent spectator to the struggles of homebuyers whose dream homes have turned into unfinished projects. It urged the Centre to consider infusing funds into stalled housing projects and to explore the possibility of taking over such projects.
What is the significance of the right to housing according to the court?
The court emphasized that the right to housing is not only a contractual entitlement but also part of the fundamental right to life. It stated that the state carries a constitutional obligation to ensure that the dreams of citizens to own a home do not turn into a lifelong nightmare.
What is the proposed revival fund, and who will oversee it?
The court suggested establishing a revival fund under the National Asset Reconstruction Company Ltd (NARCL) or by expanding the SWAMIH Fund. The fund will provide bridge financing for stressed projects undergoing Corporate Insolvency Resolution Process (CIRP). The Comptroller and Auditor General (CAG) will conduct a comprehensive periodic performance audit to prevent misuse of funds.
What measures did the court suggest to prevent developers from defrauding homebuyers?
The court called for the creation and strict enforcement of a framework to prevent developers from defrauding or exploiting homebuyers. It also emphasized the need to address speculative practices and a parallel cash economy in the real estate market.
What is the court's stance on the government's role in protecting homebuyers' interests?
The court concluded that the government must take proactive measures to safeguard the interests of homebuyers and prevent their investments from being eroded in stalled and abandoned projects. It stressed the importance of timely project completion and the well-being of homebuyers.
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