New Delhi, April 9 The resolution of insolvency cases in the real estate sector should adopt a project-centric approach to ensure timely project completion, rather than prioritizing financial recovery, according to a panel set up by the insolvency regulator.
The committee, established by the Insolvency and Bankruptcy Board of India (IBBI) following the Supreme Court's direction in September 2025, included representatives from the Ministry of Corporate Affairs, the Ministry of Housing and Urban Affairs, and other stakeholders.
The apex court, in its order on September 12 last year, asked the IBBI to frame guidelines, in consultation with Real Estate Regulatory Authorities (RERAs), for real estate insolvency, including timelines for project-wise resolution and safeguards for homebuyers.
The committee noted that insolvency in the real estate sector presents unique challenges as it directly affects a large number of homebuyers whose primary expectation is the completion and delivery of homes, rather than financial recovery.
It emphasised the need to shift from an entity-centric, recovery-focused framework to a project-centric approach to ensure the timely completion of housing projects.
The panel adopted a consultative and evidence-based approach, undertaking extensive consultations with financial institutions, industry representatives, homebuyer associations, insolvency professionals, resolution applicants, and domain experts, according to a release.
It also analysed judicial pronouncements, empirical data, and practical experiences from real estate insolvency cases.
The panel also highlighted the need for stronger coordination between the Insolvency and Bankruptcy Code (IBC) and the Real Estate (Regulation and Development) Act, 2016.
The committee examined 55 key issues affecting real estate insolvency and made 155 recommendations covering structural, procedural, and institutional aspects of the framework.
These measures are aimed at improving efficiency, ensuring timely completion of projects, enhancing stakeholder confidence, and strengthening alignment between insolvency processes and sectoral regulation, the release said.