The situation below is a composite illustration, not an account of an actual client matter, and is used here only to show how the law applies to a common set of facts.
The illustrative scenario
A homebuyer is trying to understand can a homebuyer use the insolvency process against a builder. The Supreme Court's distinction between genuine homebuyers and speculative investors under IBC Section 7.
The question
A reader in this situation might ask:
Can I file an insolvency case against my builder if my flat is delayed?
How the general rule applies
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.
Typically, 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.
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.
What often gets missed in situations like this
- Assuming the IBC route is always available or always the fastest option — courts scrutinise whether the buyer genuinely intends to occupy the home or is acting as an investor.
- Overlooking RERA as the primary, often faster, forum for a straightforward refund or delay claim.
As noted above, this scenario is a constructed illustration used to explain the general rule — it does not describe a real client, case, or outcome.
For the general rules, see Can a Homebuyer Use the Insolvency Process Against a Builder?, RERA Refunds With Interest: Your Right Under Section 18, and RERA and Homebuyer Rights: An Overview.
If you are weighing a decision on this, a short consultation can help map out the options.
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.