Common questions on can a homebuyer use the insolvency process against a builder, explained in plain terms, under Indian law.
Before the frequently asked questions
In Mansi Brar Fernandes v Shubha Sharma (12 Sep 2025), the Supreme Court held that the IBC s.7 route (initiating insolvency proceedings as a financial creditor) is intended for genuine homebuyers seeking their home, not for speculative investors, and directed states to strengthen their RERAs.
As a general rule, an IBC (Amendment) Act 2026 passed both houses of Parliament by 1 Apr 2026 and reportedly introduces project-wise resolution for real estate insolvencies, though the detail of this change has not been independently confirmed beyond news reports.
Frequently asked questions
Can I file an insolvency case against my builder if my flat is delayed?
It depends on your intent and facts. The Supreme Court held in Mansi Brar Fernandes v Shubha Sharma (12 Sep 2025) that this route under IBC s.7 is meant for genuine homebuyers seeking their home, not speculative investors, and encouraged strengthening RERA as the primary forum.
For a fuller explanation, see RERA Refunds With Interest: Your Right Under Section 18 and RERA and Homebuyer Rights: An Overview.
If this touches a situation you are dealing with, you are welcome to discuss it in a consultation.
This page is general information about the law in India and is not legal advice. The position can vary with the facts, so it is worth getting advice on your specific situation.
This page provides general information about the law in India and is not legal advice. For advice on your specific situation, please consult a qualified advocate.