SC: Govt must infuse funds in stalled housing projects, protect buyers

NEW DELHI: Observing that the plight of tax-paying middle-class homebuyers presents a disheartening picture as their "dream home" has been reduced to an unfinished building despite paying EMIs, SC Friday said govt cannot remain a silent spectator to the woes faced by lakhs of homebuyers across the country and appealed to Centre to infuse funds in stalled housing projects and also consider taking over such projects.

A bench of justices J B Pardiwala and R Mahadevan said that right to housing is not merely a contractual entitlement, but a facet of the fundamental right to life. Their protection is a constitutional obligation and govt must ensure that the dreams of India's citizens of having their own home does not turn into a lifelong nightmare, it added.

The court also asked Centre to consider establishing a revival fund under NARCL or expanding the SWAMIH Fund.

The State carries a constitutional obligation to create and strictly enforce a framework wherein no developer is permitted to defraud or exploit homebuyers. Ensuring timely project completion must be a cornerstone of India's urban policy. Equally, the State must proactively address the menace of a parallel cash economy and speculative practices in the real estate market, which artificially inflate housing costs and enable 'trigger-happy' investors seeking easy exits to jeopardise the interests of genuine end-users," the bench said.

In view of increasing number of real estate housing projects across the country coming under insolvency proceedings which has left lakhs of homebuyers in the lurch with uncertainty over getting possession of these houses, SC said the Centre may consider establishing a body corporate, on the lines of National Asset Reconstruction Company Ltd or otherwise, promoted by real estate/ construction-focused PSUs or through public-private partnerships, to identify, take over, and complete stalled projects under the IBC framework.

It said home is not merely a roof over one's head, but a reflection of one's hopes and dreams which must be protected by govt.

"The plight of tax-paying middle-class citizens paints a disheartening picture. Having invested their lifelong savings in pursuit of a home, many are compelled to shoulder a double burden - servicing EMIs on one hand, and paying rent on the other - only to find their dream home reduced to an unfinished building. In some cases, construction has not even commenced despite full or substantial payment," it said.

"The Union govt shall consider establishing a revival fund under NARCL or expanding the SWAMIH Fund, to provide bridge financing for stressed projects undergoing CIRP, thereby preventing liquidation of viable projects and safeguarding homebuyer interests. Under SWAMIH Fund initiative, every rupee must be utilised strictly for its intended purpose of last-mile financing. To prevent misuse, we direct that a comprehensive periodic performance audit by the CAG be carried out," it said.

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