Indian real estate sector expects wave of reforms after SC judgment

2-judge Bench issued a wide-ranging set of 12 binding directions, including framing of specific guidelines for insolvency proceedings in real estate

- SANKET KOUL & PRACHI PISAL

Developers and legal experts believe that the Supreme Court's recent ruling, in which it ordered a host of reforms in the real estate sector, while describing housing a fundamental right and terming speculative buyers as a "slow poison", will usher in a new era and instil confidence among the genuine buyers.

The apex court, while hearing a batch of petitions arising out of a National Company Law Appellate Tribunal (NCLAT) decision on a housing project in Greater Noida, has termed housing as a fundamental right under Article 21 of the Constitution.

Noting that housing is neither a luxury nor a speculative instrument, but a fundamental human need, a two-judge bench comprising justices JB Pardiwala and R Mahadevan issued a wide-ranging set of 12 binding directions, which included asking authorities to frame specific guidelines for insolvency proceedings in real estate, including timelines for project-wise CIRP and safeguards for allottees.

Abhishek A Rastogi, founder, Rastogi Chambers said that the SC judgment provides much-needed doctrinal clarity by carving out the category of speculative investors from genuine homebuyers under the IBC framework.

"The way forward now lies in a factsensitive application of this principle so that bona fide buyers, who often sign builder-dictated agreements, are not unfairly excluded," he added.