Supreme Court Urges Govt to Infuse Funds in Stalled Housing Projects, Protect Buyers
The Supreme Court has called on the government to infuse funds into stalled housing projects and protect the interests of middle-class homebuyers, emphasizing that the right to housing is a fundamental right and a constitutional obligation.
Supreme CourtHousing ProjectsHomebuyersNarclSwamih FundReal Estate NewsSep 12, 2025
A bench of Justices J B Pardiwala and R Mahadevan emphasized that the right to housing is not merely a contractual entitlement but a facet of the fundamental right to life. The bench stated that the government has a constitutional obligation to ensure that the dreams of India's citizens of owning a home do not turn into a lifelong nightmare.
The court also appealed to the Centre to consider establishing a revival fund under the National Asset Reconstruction Company Ltd (NARCL) or expanding the Strategic Debt Restructuring and Asset Management Investment Hub (SWAMIH) Fund. The bench stressed that 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.
In view of the increasing number of real estate housing projects coming under insolvency proceedings, the Supreme Court suggested that the Centre may consider establishing a body corporate, on the lines of NARCL or otherwise, promoted by real estate/construction-focused public sector units (PSUs) or through public-private partnerships, to identify, take over, and complete stalled projects under the Insolvency and Bankruptcy Code (IBC) framework.
The court highlighted that a home is not merely a roof over one's head but a reflection of one's hopes and dreams, which must be protected by the government. The plight of tax-paying middle-class citizens paints a disheartening picture. Many have invested their lifelong savings in pursuit of a home, only to find themselves shouldering a double burden—servicing EMIs on one hand and paying rent on the other—only to see their dream home reduced to an unfinished building. In some cases, construction has not even commenced despite full or substantial payment.
The Union government is directed to consider establishing a revival fund under NARCL or expanding the SWAMIH Fund to provide bridge financing for stressed projects undergoing Corporate Insolvency Resolution Process (CIRP). This will prevent the liquidation of viable projects and safeguard homebuyer interests. The court also directed that every rupee must be utilized strictly for its intended purpose of last-mile financing, and a comprehensive periodic performance audit by the Comptroller and Auditor General (CAG) must be carried out to prevent misuse.
Frequently Asked Questions
What is the main concern of the Supreme Court regarding homebuyers?
The Supreme Court is concerned about the plight of tax-paying middle-class homebuyers whose 'dream homes' have turned into unfinished buildings, despite their continued payment of EMIs.
What did the Supreme Court urge the government to do?
The Supreme Court urged the government to infuse funds into stalled housing projects and protect the interests of homebuyers, emphasizing that the right to housing is a fundamental right and a constitutional obligation.
What is the SWAMIH Fund, and how can it help?
The SWAMIH Fund is a strategic debt restructuring and asset management investment hub. It can provide bridge financing for stressed projects undergoing Corporate Insolvency Resolution Process (CIRP), preventing the liquidation of viable projects and safeguarding homebuyer interests.
What role should the government play in ensuring timely project completion?
The government should 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.
What is the National Asset Reconstruction Company Ltd (NARCL)?
NARCL is a body corporate that the Supreme Court suggested the government consider establishing to identify, take over, and complete stalled projects under the Insolvency and Bankruptcy Code (IBC) framework.
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