Dream homes in limbo: SC pushes Centre for revival fund to protect buyers

If you're a homebuyer stuck in a delayed project, the SC's observations may pave the way for faster resolutions

The Supreme Court has stepped in once again to highlight the plight of millions of middle-class homebuyers left stranded by stalled or incomplete housing projects. In a strongly worded judgment, a bench of Justices J B Pardiwala and R Mahadevan called on the Centre to create a revival fund to provide bridge financing for stressed projects—ensuring that buyers’ life savings do not remain locked in unfinished buildings.

 

The bench stressed that homebuyers—many of whom are forced to pay both EMIs and rent while waiting for possession—cannot be left at the mercy of errant developers. “Having invested their lifelong savings in pursuit of a home, many are compelled to shoulder a double burden… only to find their ‘dream home’ reduced to an unfinished building,” the court observed.

 

 

Key Highlights from the SC Order

 

Revival Fund Proposal:

The court asked the Centre to consider setting up a body corporate, similar to the National Asset Reconstruction Company Ltd (NARCL), or expand the existing SWAMIH Fund to provide last-mile financing for stalled projects.

 

Bridge Financing for Stressed Projects:

Funds would be used to complete viable projects under the Insolvency and Bankruptcy Code (IBC) framework, preventing liquidation and protecting buyers’ interests.

 

Use of Unsold Inventory:

Unsold flats from such projects could be diverted to affordable housing schemes like PMAY or used for government housing.

 

Strengthening RERA

The bench warned that RERA authorities risk becoming “toothless tigers” unless empowered with infrastructure, resources, and enforcement capacity.

 

NCLT/NCLAT Reforms:

Vacancies in tribunals must be filled urgently, with ad hoc appointments of retired judges if required. Dedicated IBC benches should be set up to fast-track real estate cases.

 

Escrow Accounts & SOPs:

For new projects, buyer payments must go into escrow accounts and be released in line with construction progress, ensuring accountability.

 

Audit & Transparency:

The court ordered a CAG performance audit of funds like SWAMIH to ensure every rupee is used strictly for last-mile financing.

 

Right to Housing as a Fundamental Right:

The judgment underscored that housing is not just a contractual entitlement but part of the fundamental right to life under Article 21.

 

What This Means for Homebuyers

 

Better Protection: If implemented, the revival fund could rescue thousands of families stuck in stalled projects.

 

Reduced Stress: Bridge financing will help ensure construction resumes, giving buyers clarity on possession timelines.

 

Stronger RERA: Buyers may see faster enforcement of complaints against developers.

 

Affordable Housing Boost: Unsold inventory could be repurposed into schemes like PMAY, widening access to housing.

 

The Bigger Picture

 

India’s real estate sector has been grappling with stalled projects for over a decade. According to industry estimates, over ₹5 lakh crore worth of housing projects are delayed, affecting lakhs of families. While schemes like SWAMIH have offered partial relief, delays and inconsistent enforcement have left many stranded.

 

By stressing the constitutional right to housing and directing systemic reforms, the Supreme Court has placed the onus squarely on the government and regulators.