Government Must Pump Money Into Stalled Projects To Protect Buyers, says SC

New Delhi, September 16, 2025: The Supreme Court came to the aid of middle-class homebuyers last week, saying that the government cannot remain silent on the woes faced by lakhs of homebuyers countrywide and appealing to the Centre to pump funds into stalled housing projects. The Centre must consider taking over such projects, it said at a hearing on September 12.

A bench of justices J B Pardiwala and R Mahadevan said that right to housing is not merely a contractual entitlement, but reflects the fundamental right to life. Their protection is a constitutional obligation; the dreams of citizens must not turn into a lifelong nightmare, it said. The court also asked Centre to consider establishing a revival fund.

The State is constitutionally obliged to create and enforce a framework wherein no developer is permitted to defraud or exploit homebuyers. It 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.

The court said that the Centre may consider establishing a body on the lines of National Asset Reconstruction Company Ltd or otherwise, promoted by real estate/ construction-focused PSUs or through public-private partnerships, to identify, take over, and complete stalled projects under the IBC framework.

“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 Union govt 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 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,” it said.