SC: Cannot use insolvency to deny dignified housing

Insolvency protection cannot become an instrument to perpetuate displacement or defer the constitutional promise of dignified housing, the Supreme Court underlined on Friday, stressing that the Insolvency and Bankruptcy Code (IBC) was never intended to shield developers who default, abandon performance or frustrate projects of public significance. Economic revival, the court held, cannot eclipse citizens' fundamental right to live in safe and habitable conditions.

- Utkarsh Anand

The bench said the 'law must balance commercial rights with human realities'.

A bench of justices JB Pardiwala and R Mahadevan dismissed an appeal filed by AA Estates Private Limited, currently undergoing Corporate Insolvency Resolution Process (CIRP), challenging a September 2024 judgment of the Bombay high court that had cleared the way for redevelopment of dilapidated Kher Nagar Sukhsadan Cooperative Housing Society in Bandra (East), Mumbai.

The high court had permitted the society's plea and directed authorities to process redevelopment permissions in favour of the newly appointed developer, Tristar Development LLP, after years of delay and alleged obstruction by AA Estates and its Resolution Professional (RP).