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Informist, Wednesday, Apr. 8, 2026

 

NEW DELHI – A report released Wednesday by a committee set up by the Insolvency and Bankruptcy Board of India has called for setting up National Company Law Tribunal benches specialising in real estate matters in key jurisdictions like Delhi and Mumbai. These benches would be staffed by members having expertise in infrastructure and project finance.

 

The absence of specialised benches with sector-specific expertise is a problem in resolving insolvency cases involving real estate projects as adjudication may not adequately account for the technical and financial realities of completiion of a real estate project, according to the report. In 2025, the Supreme Court had directed the IBBI to frame sector-specific guidelines for real estate insolvency, including timelines for project-wise corporate insolvency resolution processes and safeguards for allottees.

 

The committee set up by IBBI was chaired by Jayanti Prasad, whole-time member of the board, and comprised representatives from the Ministry of Corporate Affairs, Ministry of Housing and Urban Affairs, the real estate regulatory authorities of Uttar Pradesh and Haryana, and the Haryana Shahri Vikas Pradhikaran.

 

The committee has recommended that insolvency proceedings in the real estate sector should ordinarily be admitted on a project-wise basis, with each real estate project treated as an independent unit for the purpose of insolvency admission and resolution. Admission of insolvency may be confined to the defaulting project, and solvent, completed, or unrelated projects by the same developer may be excluded, it said.

 

The insolvency board may specify that escrow accounts linked to the real-estate project going through an insolvency resolution should not be frozen by the relevant real estate regulatory authority just because the corporate debtor has been admitted under insolvency, the committee further said. The accounts must remain operational to receive homebuyer receivables and funds for construction.

 

The panel suggested that where land and development rights are split across different group entities, the tribunal may exercise its power to order procedural consolidation of assets required for the project's completion, treating the land-holding entity and the development entity as a single economic unit for the limited purpose of the resolution plan. It also recommended that the Ministry of Housing and Urban Affairs, in coordination with state governments, may notify unified standard operating procedures for development authorities dealing with insolvency cases.

 

Land authorities should be accorded the status of special invitees to meetings of the committee of creditors where land-related issues are discussed, the panel further recommended. Similarly, they must be included as members of the monitoring committee for implementation of the resolution plan.

 

All homebuyers should be automatically included in the list of creditors and disclosed in the information memorandum based on the corporate debtor's books of accounts, the panel said. Further, the real estate regulatory authority concerned may strengthen existing monitoring mechanisms to ensure that the developer in question is filing and updating details of allottees for all projects, including those entering insolvency.

 

The resolution plan must mandatorily constitute a project monitoring committee comprising representatives of homebuyers, lenders, land authorities, the real estate regulatory authority concerned, sector specialists, and the successful resolution applicant, the committee headed by Prasad said. Upon approval of the plan, the real estate project's new timeline and specifications must be registered with the regulatory authority. The terms of "plan implementation" must be defined not just by financial settlement but by physical construction milestones, it added.

 

The recommendations seek to harmonise the insolvency law with real estate regulation, judicial guidance, and constitutional values, ensuring that the Insolvency and Bankruptcy Code, 2016, functions as an instrument of resolution rather than prolonged uncertainty, the panel said. The ultimate measure of success, as the committee emphasises, lies not in procedural metrics but in the delivery of homes, restoration of trust, and revival of stalled economic value, it said.  End

 

Reported by Surya Tripathi

Edited by Rajeev Pai

 

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