1. Background & Genesis

The IBBI constituted this Committee pursuant to directions issued by the Supreme Court on 12 September 2025 in Mansi Brar Fernandes v. Shubha Sharma & Ors. (Civil Appeal No. 3826 of 2020). The Court, while examining whether assured-return allottees qualified as genuine homebuyers under Section 7 of the IBC, issued sweeping systemic directions calling for sector-specific guidelines, including project-wise timelines and homebuyer safeguards.

The Committee was chaired by Jayanti Prasad, Whole Time Member, IBBI, and comprised representatives from MCA, MoHUA, RERA authorities (UP, Haryana), and land development authorities (HSVIDC). The report was submitted on 7 April 2026.

2.  The Mansi Brar Fernandes Judgment (12 September 2025)

This is the foundational trigger for the entire Report. The Supreme Court examined whether allottees with buy-back or assured-return arrangements could invoke Section 7 of the IBC as genuine homebuyers. Key holdings:

• Allottees with buy-back/assured-return arrangements are speculative investors, not genuine homebuyers, and cannot initiate CIRP under Section 7.
• The IBC is a collective resolution mechanism, not a tool for individual debt recovery.
• Genuineness of an allottee is fact-specific, guided by: intent to take possession; presence of buy-back clauses; substitution of possession with refund; deviation from the RERA Model Agreement; purchase of multiple units; and insistence on unrealistic returns.
• The right to shelter is part of Article 21 (right to life) — housing must not become a speculative commodity.
• RERA is the primary forum for homebuyer grievances; the IBC should operate as a measure of last resort.
• The Court directed IBBI (in consultation with RERA authorities) to frame sector-specific guidelines — the immediate genesis of this Committee.

3.  Scale of the Problem (as of 30 September 2025)

Category	No. of Cases	Homebuyers Affected
Total admitted real estate CIRPs	553	~2,49,087
Resolved	95	~1,40,200
Liquidated	43	—
Withdrawn / Closed / Settled	194	—
Ongoing (active)	221	~1,08,887

The Jaypee Infratech resolution (NCLT approval: 7 March 2023) — involving 21,000 homebuyers and Rs. 12,800 crore in claims — is cited as the benchmark of what structured IBC resolution can achieve in real estate.

4.  Core Structural Issues Identified (55 Issues Total)

The Committee identified 55 critical issues constituting the primary bottlenecks in real estate insolvency resolution, organised below chronologically across the CIRP lifecycle.

A.  At Admission Stage

1. Fragmented SPV structures — Land, development rights, and financing are split across related entities. When one entity enters CIRP, development authorities invoke lease cancellation, rendering resolution plans unviable and causing prolonged litigation.
2. Speculative triggers — Allottees with investment-oriented arrangements (assured returns, buy-backs) misusing Section 7 as a debt-recovery tool, clogging the insolvency system.
3. Threshold calibration issues — The 100-allottee/10% threshold may not adequately filter frivolous applications while also creating barriers for genuinely aggrieved homebuyers in smaller projects.

B.  During the CIRP

• No reliable technical/cost data — Information Memoranda omit cost-to-complete estimates, approval validity timelines, and construction schedules. This information asymmetry deters credible resolution applicants and leads to sub-optimal outcomes.
• Frozen escrow accounts — Escrow and project accounts are frozen upon CIRP admission despite having sufficient funds for construction. No uniform SOP governs their operation during insolvency.
• Absence of SOPs with development authorities — Authorities respond inconsistently: some cooperate, others demand full dues with penalties and initiate lease cancellation. Even post-NCLT approval, authorities raise fresh objections outside the CIRP record.
• Expiry of regulatory approvals — RERA approvals and building plan sanctions lapse during prolonged CIRPs due to delays inherent in the process. No fast-track revalidation mechanism exists.
• Unilateral authority powers — Land-owning authorities (NOIDA, GNIDA, etc.) retain powers of lease termination outside the CIRP framework, exercised even after plan approval, generating systemic uncertainty for resolution applicants.
• Passive Authorised Representatives (ARs) — ARs function as passive intermediaries, circulating documents without structured homebuyer engagement. Resolution plans with onerous clauses are approved without meaningful deliberation.
• Belated claims and post-approval litigation — Large dispersed homebuyer populations generate massive belated claims that destabilise negotiations, inflate liabilities, and trigger prolonged litigation against approved plans.
• CoC voting distortion — Aggregation of FC claims across multiple projects dilutes homebuyer representation and skews CoC decision-making in entity-level CIRPs.
• Absence of group insolvency framework — No mechanism to handle interconnected SPV-based real estate groups. Viable projects get dragged into insolvency due to group-level defaults.

C.  Post-Approval Stage

1. Post-approval execution failures — Construction remains stalled for years after NCLT approval; SRAs impose undisclosed administrative charges; monitoring committees cease to function after management handover.
2. Uncertain ‘clean slate’ — Tax and regulatory authorities reopen pre-CIRP demands (property tax, EDC, penalties) despite resolution plan approval, discouraging resolution applicants and increasing funding costs.
3. Weak IBC-RERA transition — No structured handover from IBC oversight to RERA monitoring post-approval, creating a regulatory vacuum during the critical implementation phase.

D.  Systemic / Institutional

1. Prolonged NCLT timelines — Gap between CoC approval and NCLT approval can be significant; no specialised real estate benches exist; frequent bench transfers and adjournments continue to erode project viability.
2. Low RA participation — Most processes attract only a handful of bidders due to information asymmetry, unclear legacy dues, and limited unsold inventory. Sub-optimal plans get approved by default.
3. Reverse CIRP — Has evolved judicially but lacks statutory basis; allows Section 29A-disqualified promoters to retain control, in direct conflict with the Code’s foundational principles.

5.  Key Objections Flagged in the Report

The following represent the most contested and contentious issues identified across stakeholders during the Committee’s consultations:

Objection 1: Speculative vs. Genuine Homebuyer Distinction

Drawing a sharp regulatory line is not feasible at the stage of CoC participation — it is workable only at the CIRP initiation stage (Section 7). The Committee found that blanket exclusion of all multi-unit purchasers from the CoC is not recommended. The determination remains inherently fact-specific.

Objection 2: Reverse CIRP

The Committee expressly opposes Reverse CIRP. While courts have permitted it in a handful of cases, the mechanism allows defaulting promoters to regain control in violation of Section 29A of the Code. The Committee recommends its phasing out in favour of project-wise CIRP admission with Section 29A-compliant resolution applicants.

Objection 3: ‘Clean Slate’ Principle under Challenge

Authorities have continued to raise pre-CIRP demands (property tax, EDC, penalties) post-plan approval, directly undermining the clean slate principle codified in the Code. The Committee objects to this practice and recommends explicit regulatory provisions barring withholding of OCs/CCs on account of settled pre-CIRP arrears.

Objection 4: Moratorium Scope Disputes

Whether Section 14 moratorium covers execution of registered sale deeds or homebuyer-specific possession rights has been actively contested across multiple NCLT and appellate proceedings. The Report flags this as a live unresolved controversy requiring statutory clarification.

Objection 5: Completed/Occupied Projects Swept into CIRP

When entity-level CIRPs are admitted, entirely solvent and completed sub-projects of the same developer get trapped under the moratorium regime. This harms allottees who have paid in full and are entitled to possession, with no nexus to the defaulting project.

Objection 6: Development Authority Lease Terminations During Moratorium

Authorities have been invoking lease cancellation despite the Section 14 moratorium being in force. The Committee objects to this as contrary to the moratorium regime and the binding nature of NCLT-approved resolution plans.

Objection 7: RERA Escrow Freezing Contradicts RERA’s Own Mandate

RERA authorities freezing project escrow accounts upon CIRP initiation contradicts RERA’s own ring-fencing mandate under Section 4(2)(l)(D), which requires project funds to remain ring-fenced for that specific project. The Report objects to this practice as self-defeating.

6.  Key Recommendations

The Committee made 155 specific recommendations across 55 issues. The principal recommendations are organised thematically below.

A.  Structural Reforms

• Project-wise CIRP admission as the default rule. Entity-level CIRPs permitted only where commingling of funds, cross-collateralisation, or demonstrable fraud is proven. The AA must record specific reasons for any deviation.
• Procedural consolidation of SPV-based structures for limited resolution purposes where land and development rights are split across related entities.
• Exclusion of completed and occupied projects from CIRP proceedings of the Corporate Debtor.
• AA to order procedural consolidation for interdependent SPVs within the same real estate group for coordinated decision-making without asset merger.

B.  Process Improvements

• Mandatory independent technical assessment (cost-to-complete, approval status, construction progress, inventory) to be an integral part of every Information Memorandum.
• Mandatory operation of project-wise escrow accounts during CIRP — not to be frozen by RERA upon CIRP admission. Withdrawals certified by both a CA and an Engineer, restricted to that specific project.
• Uniform SOPs for development authorities covering: dues restructuring formulae (principal + simple interest, no penal interest), moratorium compliance advisories, and binding obligations post-plan approval.
• Automatic extension and fast-track revalidation of RERA approvals for the CIRP duration. Dedicated ‘Insolvency Clearance Windows’ in local bodies with 30-day processing timelines.
• Land authorities to be accorded status of special invitees to CoC meetings where land issues are discussed, and as members of the monitoring committee.

C.  Homebuyer Protection

• Automatic inclusion of homebuyers in the list of creditors based on RERA records, CD books, or IU (NeSL) records — without requiring individual claim filings.
• Structured AR engagement — mandatory town halls and webinars before every critical vote; summaries of plan deviations from Builder-Buyer Agreements; AR meeting records submitted to RP.
• Allottee choice in resolution plans — between possession and refund — not imposed unilaterally.
• Moratorium on home loan EMIs payable by homebuyers during the CIRP period.
• Dedicated fund for homebuyer litigation support.
• Simplified claim filing process through Information Utility portal.

D.  Post-Resolution Framework

• Project Monitoring Committees (PMCs) comprising homebuyer representatives, lenders, land authorities, concerned RERA, and the SRA — mandatory under every resolution plan.
• Plan implementation milestones defined by physical construction completion, not merely by financial settlement.
• Formalised RERA handover — resolution plan timelines and specifications to be registered with RERA post-approval. RERA to enforce penal powers against defaulting SRAs.
• Strict clean slate — explicit waiver of all pre-CIRP penalties, EDC arrears, and fines upon plan approval. Withholding of OC/CC on account of settled pre-CIRP arrears prohibited.

E.  Institutional Reforms

• Specialised NCLT Real Estate Benches in Delhi and Mumbai, staffed with expertise in infrastructure and project finance.
• Phasing out of Reverse CIRP in favour of project-wise CIRP with Section 29A-compliant resolution applicants.
• Enhanced Information Memorandum quality — Red Herring Prospectus standard with detailed disclosure of completion status, sale status, and possession/refund status.
• PSU participation encouraged — NBCC and HUDCO to act as Project Management Consultants or resolution applicants for stalled real estate projects.
• SWAMIH Fund and last-mile financing windows to be integrated into the resolution process for credible bidders.
• Information Utility (NeSL) mandated to store real estate allotment and payment history data for claim verification.
• Eligibility criteria for resolution applicants to be relaxed for Associations of Allottees bidding for their own projects.

7.  Overarching Conclusion

Central Thesis of the Committee Real estate insolvency must shift from an entity-centric, recovery-oriented model to a project-centric, completion-driven framework. The IBC should function as a tool of resolution — delivering homes and restoring trust — rather than as an instrument of prolonged debt enforcement.

The 155 recommendations are calibrated to introduce predictability, protect homebuyers without sacrificing commercial feasibility, and bridge the structural gap between the IBC and RERA regimes. The Committee emphasises that the ultimate measure of success lies not in procedural metrics but in the delivery of homes, restoration of trust, and revival of stalled economic value.

The Report is primarily directed at residential real estate, which accounts for the overwhelming majority of real estate insolvency cases and carries pronounced public interest implications — each homebuyer representing a household whose housing security, capital, and financial stability have been compromised by a developer’s insolvency.