IBBI Committee Submits 155 Recommendations for Real Estate Insolvency Guidelines
The Committee on Framing Guidelines for Insolvency Proceedings in the Real Estate Sector, chaired by Jayanti Prasad, Whole Time Member of the Insolvency and Bankruptcy Board of India (IBBI), has submitted a comprehensive report with 155 recommendations aimed at improving efficiency and ensuring timely completion of real estate projects.
Key Recommendations:
- Project-wise insolvency admission to enhance stakeholder confidence and ensure timely completion of projects
- Procedural consolidation of land and development rights for efficient resolution of insolvency cases
- Mandatory operation of project-wise escrow accounts to safeguard homebuyers' interests
- Comprehensive audit by independent technical agencies to determine physical progress of construction and Cost-to-Complete estimates
- Escrow accounts linked to real estate projects under Corporate Insolvency Resolution Process (CIRP) should not be frozen by Real Estate Regulatory Authorities (RERAs)
The committee's report recognizes the unique challenges posed by real estate insolvency, which affects large numbers of homebuyers whose primary expectation is completion and delivery of homes rather than financial recovery.
Background:
The IBBI constituted the committee last year following directions of the Supreme Court in its September 2025 ruling in the case of Mansi Brar Fernandes versus Shubha Sharma and others.
Impact:
The committee's examination of insolvency data reveals that the real estate sector constitutes one of the largest and most complex segments within the insolvency ecosystem, with hundreds of real estate cases admitted since the Code's inception.
Next Steps:
The committee's recommendations are aimed at strengthening alignment between insolvency processes and sectoral regulation, ensuring timely completion of projects, and enhancing stakeholder confidence.