INTRODUCTION TO RERA V IBC
This paper explores the overlapping jurisdictions of the Real Estate (Regulation and Development) Act (RERA) and the Insolvency and Bankruptcy Code ( IBC ) and the conflicts that arise when these legal frameworks intersect in real estate disputes. With developers increasingly embroiled in insolvency proceedings under IBC, the interests of allottees—primarily homebuyers—have become a critical area of concern.
The conflicting provisions of RERA and IBC present significant challenges, particularly in allottees’ claims prioritization, managing ongoing construction projects, and enforcing RERA orders during insolvency proceedings.
This ambiguity in handling has opened up vulnerabilities for the homebuyers, who, despite significant investments, often end up low in the hierarchy of insolvency. It, therefore, becomes a case of striking a balance where the conflicts can be resolved without compromising on the fundamental intent of both RERA and IBC.
While RERA is aimed at regulating real estate projects and safeguarding the interests of homebuyers, IBC emphasizes balanced resolution of insolvency among creditors such as financial institutions. The paper highlights the urgent necessity of solving these conflicts to make the real estate and suggests a harmonious framework which would bridge the overlaps.
A harmonious framework is sought to be proposed here, looking into judicial precedents as well as policy shortcomings; this framework prioritizes claims of allottees, ensures enforcement of RERA orders, and introduces mechanisms for continued operation of real estate projects under insolvency proceedings. A balanced resolution is important to protect the interests of all stakeholders, including landowners, developers, and creditors, without unduly prejudicing homebuyers. The proposed solutions aim to streamline conflict resolution, create consistency in legal interpretations, and provide robust protections for allottees, fostering stability and trust within the real estate industry.
Keywords: RERA, IBC, Real Estate Law, Allottee Rights, Insolvency Jurisprudence
I . INTRODUCTION
The Real Estate (Regulation and Development) Act[1] (RERA) and the Insolvency and Bankruptcy Code[2] (IBC) are two paramount legal frameworks governing the sectors of real estate and insolvency in India. RERA, enacted in 2016, was introduced mainly to promote transparency, accountability, and efficiency in real estate, especially for safeguarding the interest of homebuyers, that is allottees. It holds developers and real estate agents liable for delays, incomplete projects, and quality standards. RERA also mandates registration of projects and agents. A mechanism for dispute resolution and consumer protection has also been provided in the real estate sector.
The IBC came into force in 2016, mainly due to the growing NPAs in the Indian economy and to simplify the process of insolvency resolution for companies and individuals. It seeks to ensure a time-bound process for the resolution of insolvency cases while protecting the interests of creditors, focusing primarily on the financial rehabilitation of the debtor.
The IBC provides for the initiation of corporate insolvency resolution proceedings (CIRP) when a company defaults on its financial obligations with the aim of ensuring a fair and structured resolution process.
Both RERA and IBC play crucial roles in upholding the integrity of their respective domains: RERA in regulating the real estate sector and safeguarding consumer rights, and IBC in resolving insolvency and financial distress. Both however, with their increasing adoption in recent times, led to conflicts in jurisdictions leading to legal disputes. As the major problem arises once developers or real estate establishments enter the IBC system; it is a conflict there with RERA’s rules and regulations. The greatest concerns have been the continuation of real estate projects ongoing, treatment of home buyers, and the enforceability of RERA orders during bankruptcy.
Overlapping jurisdictions under RERA and IBC led to confusion and litigation, most notably where insolvency had an impact on the continuation of running real estate projects and on the rights of allottees.
Under RERA, a homebuyer has the benefit of being entitled to his or her house, having it completed on time and delivered on the date given, but IBC might put that project in danger when a developer goes bankrupt. The IBC also prioritizes financial creditors instead of others, and one does not know the extent to which homebuyers’ interests will be protected in such proceedings.
The importance of a uniform approach to solve these cannot be overstated. It is also important that the interests of all stakeholders, including developers, financial creditors, and homebuyers, are balanced and protected.
A unified legal approach can bring clarity in the treatment of real estate projects in insolvency, bring priority to the rights of allottees, and simplify the resolution process. Additionally, it will reduce legal ambiguity and enhance the efficiency of both legal frameworks.
II. Legal Frameworks and Stakeholders
- RERA: Goals, Provisions for Regulation of Real Estate Developers, and Protections for Allottees[3]
The Real Estate (Regulation and Development) Act, 2016 (RERA) was introduced with the dual objectives of regulating the real estate sector and protecting the interests of homebuyers or allottees. - The primary objectives of RERA are to infuse transparency, accountability, and efficiency into the real estate market by regulating real estate developers, ensuring that homebuyers get their promised properties on time in the condition promised. RERA mandates the registration of real estate projects and developers with regulatory authorities, thereby creating a centralized platform for monitoring and resolution of disputes.
Under RERA, before selling or advertising any units, developers are compelled to register all ongoing and new projects with the concerned state real estate regulatory authority. They are also supposed to provide minute details about the project, like project timelines, land title, and specifications of the project. When there is a delay in completion, developers are held liable to pay compensation for the period of delay towards the allottees, which forms a significant shift towards the protection of consumer rights. - Moreover, RERA provides for the establishment of Real Estate Appellate Tribunals (REATs) for the quick and effective resolution of disputes. This would help homebuyers seek redressal on grievances such as delay in possession or non-provision of promised amenities. The act also provides for the escrow deposit of a certain percentage of the project cost by developers, thereby assuring the utilization of funds only for the completion of the project. For the allottees, RERA ensures them that they have a secure place where their rights are protected. They are promised to receive possession of the property in the timeframe. The developer would be liable for compensation for delayed possession. They can also cancel the agreement if the developer does not hand over the property as agreed and claim refund with interest. RERA, therefore acts as a shield for consumers in this largely unregulated and unstructured market of real estate.
- IBC: Insolvency Procedures, Treatment of Allottees as Financial Creditors, and Implications for Developers
The Insolvency and Bankruptcy Code, 2016, provides an all-inclusive framework on resolving insolvency and bankruptcy issues of individuals and corporate entities in India. This aim to provide an effective resolution, achieve maximization of asset values and the just distribution of property interests amongst creditors. The revival and liquidation of distressed corporations shall be uniformly and determinative. Thus, the IBC would minimize delays and achieve more transparency in the settlement process.
The provisions for IBC are mainly made in regard to the dealing of financial creditors, operational creditors, and the corporate debtor. Developers are considered corporate debtors, and the financial creditors basically involved are usually lenders or banks that have provided loans for project financing. The IBC advocates for a time-bound resolution process and in its endeavor to maximize the value of the distressed assets of the company looks forward to keeping the company afloat and ensuring its business remains afloat. - The treatment of homebuyers (allottees) as financial creditors under the law is one of the most significant aspects of the IBC in the real estate sector. The Supreme Court of India, in the case of Pioneer Urban Land and Infrastructure Ltd. v. Union of India (2019), held that allottees in real estate projects are to be treated as financial creditors under the IBC.
- It is an important development because it allowed homebuyers to join the insolvency resolution process, ensuring that their claims stood on par with banks and financial institutions. Under the IBC, the moment a developer enters the arena of insolvency proceedings, the process gets underway, wherein an insolvency professional takes charge of the affairs of the corporate debtor and the CIRP begins. Allottees fall under the category of financial creditors, who are entitled to present their claims to the resolution professional.
- But their characterization as financial creditors has also sparked concerns because allottees are often unsecured creditors whose claims are often subordinate to that of the secured creditors such as the banks. Thus, homebuyers are at risk of not receiving their dues either on time or in full, in case the insolvency resolution does not ensure that their claims are placed above others.
- The treatment of allottees under IBC also brings significant implications for developers. Developers facing insolvency often shut down, particularly when there are ongoing projects under construction, and they fail to deliver them within the timelines. Furthermore, developers facing insolvency may be under coercion to sell their assets-that is, land and other properties-and this can lead to cancellation or re-pricing of real estate projects.
- Stakeholder Perspectives: Roles, Conflicts, and Rights of Landowners, Developers, Builders, and Allottees
Stakeholders in real estate transactions involve landowners, developers, builders, and allottees who, although each contributes uniquely to the sector, experience some unique challenges that face both RERA and IBC.
a) Landowners
Landowners are usually owners of land on which a real estate project is sited. Under RERA, completion of the project would be completely devoid of the direct involvement of landowners except where they themselves are developers. Under IBC, insolvency proceedings may indirectly affect landowners if the developer fails to complete the project or if the project is sold off to a new developer. In such cases, the landowners’ ability to claim their land back could be contested, depending on the terms of the development agreement and insolvency resolution process.
b) Developers: Developers are responsible for constructing and delivering real estate projects. They face dual regulation under both RERA and IBC. RERA ensures that developers complete projects on time, while IBC puts developers under insolvency proceedings when financial distress occurs. The conflict arises because the timelines stipulated under RERA cannot be met by the developer in case of insolvency, thus creating disputes between homebuyers and developers. Under IBC, the obligation to allottees might get affected by the developers when they are trying to solve the issue of insolvency in a time-bound manner.
c) Builders: Builders typically act as contractors or construction companies commissioned by developers to carry out the actual construction work of the project. They are usually treated as operational creditors under the IBC. The entry of a developer into insolvency may cause delayed payments to builders, thereby disrupting the construction schedules and delaying project completion.
d) Allottees: Allottees are the ultimate buyers of property in real estate projects. Under RERA, allottees have a right to possession in time, quality construction, and compensation for delay. But if the developer goes into insolvency under IBC, the allottees’ rights are exposed to the process of insolvency resolution. They will not get priority in the distribution of the assets of the developer, especially when financial creditors are given priority. This is a huge risk for homebuyers who may end up with half-finished or delayed properties.
The roles of stakeholders in real estate transactions are complex, as each group is affected differently by RERA and IBC. While RERA focuses on protecting homebuyers and ensuring the timely completion of projects, IBC focuses on the financial resolution of distressed developers. The overlapping jurisdictions of these two frameworks create significant conflicts, especially on the prioritization of allottees’ claims, the treatment of ongoing projects, and the rights of developers and landowners in insolvency proceedings. A balanced, unified approach is needed to reconcile these interests and ensure the fair treatment of all stakeholders involved.
III . Judicial Trends and Case Law Analysis
The Indian judicial landscape has been significant in the interpretation and application of the Real Estate (Regulation and Development) Act, RERA, and the Insolvency and Bankruptcy Code, IBC, particularly in instances where these two pieces of legislation conflict with each other. Through several landmark judgments, the judiciary has sought to address the issues stemming from the overlapping jurisdictions of RERA and IBC, particularly with regard to the treatment of allottees (homebuyers), the rights of developers, and the prioritization of creditors. This section discusses key judgments and evaluates the judiciary’s attempts to harmonize RERA and IBC to protect the interests of all stakeholders.
1. Pioneer Urban Land and Infrastructure Ltd. v. Union of India (2019) (SC)[4] The Pioneer Urban Land and Infrastructure Ltd. v. Union of India case is one of the most important judgments in the context of overlapping jurisdictions of RERA and IBC. The Supreme Court of India held that allottees of real estate projects have to be considered as “financial creditors” under the IBC. This was a turning point for this reason: until this decision, homebuyers were treated under IBC as operational creditors whereby their claims would be accorded lower priority compared with those of financial creditors like the banks and other lenders at the time of resolution by insolvency. The Court held the homebuyers as financial creditors under the
IBC because the nature of the transaction between the developer and the allottee involves a financial commitment from the homebuyer in the form of upfront payments. This ruling allows allottees to participate actively in the insolvency resolution process, enabling them to file claims with the resolution professional and be included in the committee of creditors (CoC).
It profoundly affects the rights of the homebuyers since it puts them at an advantageous position in bargaining terms during the resolution process under the insolvency and bankruptcy code, earlier dominated by the financial institutions. The order has also balanced the interest of homebuyers with the interests of the other financial creditors by strengthening the consumer protection mechanism in the real estate industry. However, this judgment has run into conflict with RERA, which emphasizes the protection of allottees’ interests through the completion of projects and delivery of possession in time, rather than through recovery of money. Thus, the difficulty is in finding a balance between these two objectives: the protection of the rights of homebuyers in real estate transactions and ensuring that insolvency proceedings can proceed effectively under the IBC.
2. Amrapali Cases (2019) (SC)[5]
The Amrapali Group cases involve simultaneous application of RERA and IBC, where special consideration is given to the interest of allottees in the case of distressed real estate projects. The Amrapali Group is a leading developer facing the insolvency process under IBC, and the issue here is how the rights of homebuyers could be protected while the process of the resolution of insolvency could be progressed.
In its judgment, the Supreme Court recognized the importance of both RERA and IBC in protecting the interests of allottees. The Court held that the insolvency proceedings should not frustrate the provisions of RERA, particularly the homebuyers’ right to possession of their properties.
To strike a balance, the Court directed the intervention of the National Building Construction Corporation (NBCC) to complete the stalled projects, ensuring that the interests of allottees were prioritized. It is quite notable for its pragmatic approach as it acknowledges the conflict between the interests of the financial creditors under the IBC and the rights of the homebuyers under RERA.
The Court has thus made an effective use of the corporate restructuring mechanism available under the IBC to allow the takeover of the incomplete projects by NBCC, which would also be completed as required under RERA. This is a case that illustrates attempts made by the judiciary to align RERA and IBC by trying to find pragmatic answers to conflicts that persist between these two frameworks. However, there is a problem in achieving the right timing in possession and completion of projects simultaneously with handling the process of insolvency.
3. M/s. Anuradha Properties Pvt. Ltd. (2022)[6]
The M/s. Anuradha Properties Pvt. Ltd. case was used to show the conflict between different tribunals and courts on the interpretation of RERA and IBC. The very same question was brought forward in this case where the NCLT interpreted the matter differently from how REAT did in terms of its handling of insolvency in relation to real estate cases including allottees.
The NCLT, herein, classified allottees as financial creditors under the IBC and moved for initiation of insolvency proceeding against the builder. Still, the REAT, inter alia concerning disputes for delay in the possession by a builder, went on to record that the relevant protections of RERA are held good to allottees while ordering completion of the same by the developer. This led to conflicting rulings regarding whether the interests of allottees should be primarily governed by RERA’s provisions for timely possession or by IBC’s focus on financial recovery.
The conflicting decisions between the NCLT and REAT illustrate the challenges in reconciling the interests of allottees under RERA and their rights as financial creditors under the IBC. Although the NCLT’s decision gives prominence to the financial aspect of the transaction, the REAT’s order focuses on the consumer protection objectives of RERA. This inconsistency points to a greater need for clarity and harmonization in judicial interpretation to ensure both the interests of allottees and the efficient resolution of insolvency proceedings.
4. The Judiciary’s Efforts to Harmonize RERA and IBC: An Analysis
The judiciary has taken big strides in trying to harmonize the provisions of RERA and IBC, but there are still some challenges. The decisions of the Supreme Court in Pioneer Urban and Amrapali reflect a sense of awareness of the complex legal and practical issues arising from the overlapping jurisdictions of these two statutes. In particular, the Pioneer Urban case’s recognition of homebuyers as financial creditors under the IBC was a landmark step towards improving the position of homebuyers in insolvency proceedings. However, the subsequent cases, such as Amrapali and M/s. Anuradha Properties, have revealed the difficulties in balancing the rights of allottees under RERA with the objectives of IBC.
A basic challenge arises from the conflict in priorities between RERA and IBC. While RERA looks to safeguard the homebuyers’ interest, ensuring that the project completes and possession is made timely, IBC focuses on either the financial restructuring or liquidation of the distressed entity. Thus, allottees’ interest is treated as subsidiary under the insolvency resolution process while priority is given to the assets distributed among financial creditors like banks.
The judiciary has tried to find practical solutions for this by, for example, appointing NBCC to complete stalled projects in Amrapali, but such measures are not possible in all cases. Moreover, the interpretation of homebuyers as financial creditors has created some degree of confusion, as it does not automatically guarantee that homebuyers’ interests will be adequately protected in the insolvency resolution process.
It is clear that there is a need for a more coherent framework that integrates the objectives of both RERA and IBC. The judicial efforts have provided interim solutions but have not really solved the tension between consumer protection and the financial restructuring of distressed developers. A more harmonized legal framework could bring about clarity on how to address the competing interests of all stakeholders in real estate insolvency cases.
IV. Challenges at the Intersection of RERA and IBC[7]
The intersection of RERA and IBC has brought to the forefront several legal and practical challenges. The main source of these challenges lies in the overlapping jurisdictions of these two frameworks, their divergent objectives, and the conflicting interests of stakeholders such as creditors, developers, and allottees. While both RERA and IBC aim to provide justice and regulatory oversight, their intersection often leads to confusion and inefficiencies. This section outlines some of the key challenges that arise when these two frameworks collide.[8]
1. Overlapping Jurisdictions and Forum Shopping
One of the biggest issues at the interface of RERA and IBC has been overlapping jurisdictions. RERA was brought to regulate the real estate sector, to promote transparency, and to protect the rights of allottees or homebuyers, whereas IBC was brought in to codify corporate insolvency in a time-bound manner. In such cases, wherein insolvency proceedings against a developer are also regulated under RERA, the jurisdictions often overlap.
Often, this overlap leads to forum shopping, wherein the stakeholders interested parties, especially developers and creditors may attempt to take advantage of the specific forum that would give them a better outcome. The IBC forums may be preferred by developers who are keen on taking their disputes there, because those forums aim to facilitate financial recovery and reorganization. Homebuyers and allottees may like to go to the RERA forums, which are a more consumer-friendly and look toward the completion of the project and delivery of possession. This kind of forum shopping undermines the purpose of such separate but complementary frameworks. It may result in litigations being prolonged, inefficiency, and confusion.
The overlap also creates a lack of clarity regarding which forum should have primary jurisdiction in specific cases. In many instances, courts have had to intervene and make decisions on which framework should take precedence, leading to delays and inconsistent rulings.
2. Conflicts in Priority Between Creditors and Allottees
There’s the problem in priority conflict, a critical one, between the financial creditors (banks, etc. and other lenders) and the allottees under IBC and RERA. In case of IBC, as per the defaulting insolvent developer, financial creditors get priority and they will be paid first and foremost, out of the assets from the insolvent developer’s pocket. This system is intended to safeguard the interests of lenders and investors who have advanced credit to the company. However, under RERA, the rights of allottees-homebuyers are given preference, as they have entered into agreements for the purchase of properties, with a legitimate expectation of possession and delivery.
The problem is that when the real estate developer is insolvent, allottees are looking to recover their dues for delayed possession or project completion. Under IBC, allottees, though end-users and consumers of the real estate project, are considered operational creditors, which puts them at a lower rung in the priority list compared to financial creditors. This creates a situation where homebuyers may not get possession of the property they paid for, while financial creditors are recovered their dues.
To achieve this, the judgment of Pioneer Urban Land and Infrastructure Ltd. v. Union of India, (2019) tried to address this problem by accepting allottees as financial creditors of IBC. However, that too has practical problems and issues in terms of providing a clear-cut framework or mechanism for determining the position of allottees’ claim vis-à-vis other claims of financial creditors. It is also aggravating because there is no clear cut co-hesiveness among the provisions.
3. Delayed Resolution of Projects due to Legal Ambiguity
Legal ambiguity with regard to the interplay between RERA and IBC has caused a delay in the resolution of real estate disputes, especially under insolvency. The conflicting provisions and the lack of clear mechanism for dealing with dual regulations result in protracted legal battles.
For instance, while RERA mandates the completion of real estate projects and possession delivery within a specified timeline, the IBC focuses on debt resolution and corporate restructuring. The simultaneous pursuit of these objectives can delay project completion, as developers may be focused on managing insolvency proceedings rather than fulfilling contractual obligations to allottees.
In cases where insolvency proceedings are initiated under IBC, the insolvency professional or the resolution committee may prioritize financial recovery over the completion of the real estate project, thereby further delaying possession for allottees.
Also, given the legal ambiguity regarding whether RERA is applicable during insolvency cases, disputes regarding delayed possession or incompletion of projects tend to suffer a delay in getting resolved amicably. The courts and tribunals may need to address all such conflicts on a case-to-case basis, resulting in the prolongation of granting relief to the homebuyers.
4. Inconsistency Approach Between RERA and IBC
The divergence approach also forms one of the challenges since RERA approaches take consumer protection with respect to safeguarding allottees by providing timely possession, quality construction, and ensuring transparency within the real estate transaction processes. It provides for penalties, compensation, and regulatory oversight to safeguard consumers in the real estate sector.
In contrast, IBC is more concerned with corporate insolvency resolution by either reorganizing or liquidating the assets of the distressed company to pay off the claims of creditors, without much consideration for consumer protection.
This difference in approach often causes friction in cases of insolvent real estate developers. While IBC aims to expedite the resolution process for creditors, RERA’s consumer-centric provisions will often pit the interests of homebuyers against each other. For example, the IBC insolvency process may lead to selling off the developer’s assets or transferring the project to a new developer, leaving allottees in a position where they are uncertain about the completion of their project or the fulfillment of their contractual obligations.
In cases such as Amrapali judgment, the Supreme Court had to intervene and bridge the divergence by directing the completion of the stalled projects with a new builder, NBCC, while simultaneously running the IBC insolvency resolution process. While this attempt tries to balance the interest of both creditors and homebuyers, it also exposed the difficulties in harmonizing these two laws and the disparate objectives they are serving.
V. Recommendations and Proposed Alternatives
Comprehensive reforms in the form of legislative amendments, judicial guidelines, policy changes, and strengthening Alternative Dispute Resolution (ADR) mechanisms would be required to address the overlapping jurisdictions between the Real Estate (Regulation and Development) Act, RERA, and the Insolvency and Bankruptcy Code, IBC. These reforms would go a long way in bringing about a more cohesive legal framework that protects all the stakeholders in the real estate sector, especially allottees, developers, and creditors.[9]
1. Legislative Reforms: RERA-IBC Coordination
The only challenge in the existing system is its failure to integrate RERA and IBC. RERA and IBC need legislative amends in order to be coordinated. The key suggestions are:
There should be clear legal provisions defining the hierarchy of jurisdiction when both RERA and IBC are simultaneously invoked, with the claims of allottees being given precedence over those of creditors for the gross injustice that might befall homebuyers otherwise.
a) Real Estate Insolvency Framework: A specific insolvency framework for real estate projects should be brought in, as is with the Corporate Insolvency Resolution Process (CIRP) in IBC, to ensure continued projects with protection for the allottees.
b) Protection of allottees’ interest: This amendment should ensure that their claims are treated at par with the financial creditors which would give them greater security in the insolvency proceedings.
2. Judicial Guidelines: Clarity from the Supreme Court
The Supreme Court should provide clear guidelines to address the complexities arising from the interaction of RERA and IBC:
a) Forum Selection Clarity: Guidelines should clarify whether complaints under RERA regarding delay or non-compliance should be decided by RERA authorities or within insolvency proceedings, thereby avoiding confusion and duplication.
b) Uniform Adjudicating Authority: A special bench or tribunal should be created to address cases where RERA and IBC overlap, in order to ensure uniformity in the application of law.
c) Priority for Allottees’ Claims: Guidelines should be issued to provide allottees’ claims for possession and project completion precedence in the process of insolvency resolution.
3. Policy Changes: The Real Estate Resolution Board (RERB)
A joint body from RERA and IBC authorities called RERB will provide real estate insolvency issues by consolidating: Standing of interests of the homebuyer, developer, as well as creditors.
Provide relief for the developers being driven to insolvency while aiding the completion of a project.
4. Institutional Mechanism
Strengthening of ADR methods, like mediation, and arbitration may enhance speed of dispute resolution with regards to real estate bankruptcy as:
a)Mediation would swiftly help settle the issue concerning any delays in a project or a question regarding RERA non-compliance.
b)Mandatory Arbitration Clauses: Inclusion of arbitration clauses in contracts would make dispute resolution much more streamlined.
c)Training ADR Professionals: Government-sponsored training of ADR professionals in real estate and insolvency matters would ensure that disputes are handled effectively.
These reforms would thus make the legal framework more effective, addressing jurisdictional conflicts between RERA and IBC while ensuring the interest of all parties involved.
VI. Conclusion
The overlapping jurisdictions of RERA and IBC have critical implications for a harmonized framework to settle disputes in real estate. Currently, legal ambiguity coupled with divergent interpretations has been one of the most significant challenges that stakeholders—especially allottees, developers, and creditors—are facing today, leading to delay, forum shopping, and inconsistent judicial outcomes. It is therefore important to balance the protection of allottees’ interests with the fact that they are mostly at the receiving end of real estate insolvencies and to ensure that developers and creditors receive fair treatment under IBC. This can only be achieved through a clear, unified approach that defines the roles and rights of each stakeholder under both statutes.
The imperative steps would be legislative amendments, judicial guidelines, and the creation of a dispute resolution body to address the gaps and conflicts between the RERA and IBC that currently exist. A strong property sector can only be attained by creating legal certainty: all stakeholders, whether homebuyer or developer, must believe in the system. Mechanisms such as mediation, arbitration, and a central resolution authority would greatly ease the process with less delay and create an atmosphere of trust and fairness for the sector.
the way forward is to create an integrated framework that promotes efficiency, resolves conflicts quickly, and balances the competing interests of stakeholders. It will not only ensure stability and growth in the real estate sector but also protect consumer interests, thereby creating a safer and more transparent market. Reforms such as these are crucial to building a strong, resilient, and future-proof real estate sector in India.
Article By Likitha Student of Symbiosis Law School Hyderabad Intern at Fastrack Legal Solutions
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[1] Real Estate (Regulation and Development) Act 2016 (India) (RERA), No. 16 of 2016
[2] Insolvency and Bankruptcy Code 2016 (India) (IBC), No. 31 of 2016
[3] S. R. Mookerjee, ‘Balancing Stakeholder Interests in Real Estate Insolvency’ (2020) 13 Journal of Indian Business Law 231
[4] Pioneer Urban Land and Infrastructure Ltd v Union of India (2019) 8 SCC 416
[5]Amrapali Group of Companies v Union of India (2019) 13 SCC 725
[6] M/s. Anuradha Properties v Union of India (2022) 4 SCC 535
[7] Real Estate Development and Insolvency Resolution Frameworks: Comparative Analysis of Global Models (2020) International Monetary Fund, Working Paper WP/20/84
[8] Sanjay Jain, ‘Resolving Conflicts Between RERA and IBC: A Legal Perspective’ (2021) 10 Indian Journal of Law and Economics 56
[9] The Role of Insolvency Laws in Housing Crisis Management: An International Perspective (2020) OECD Real Estate Policy Review, OECD Publishing
