Right to housing is fundamental right under Article 21, says Supreme Court

Highlighting the plight of tax-paying urban middle-class citizens struggling to realise their dream of a roof over their heads, the Supreme Court has asked the Centre to consider establishing a “revival fund” to provide bridge financing for stressed projects to safeguard home buyers’ interests.

“The right to housing is not merely a contractual entitlement but a facet of the fundamental right to life under Article 21. Genuine homebuyers represent the backbone of India’s urban future, and their protection lies at the intersection of constitutional obligation and economic policy,” a Bench of Justice J B Pardiwala and Justice R Mahadevan said on Friday.

“A home is not merely a roof over one’s head; it is a reflection of one’s hopes and dreams – a safe space for a family, a refuge from the worries of the world,” it said, adding the government cannot remain a “silent spectator” as it’s constitutionally obliged to protect the interests of homebuyers and the economy at large.

Reminding the State of its constitutional obligation to create and strictly enforce a framework where no developer was permitted to defraud or exploit homebuyers, the Bench said ensuring timely project completion must be a cornerstone of the country’s urban policy.

The top court also said it was imperative that RERA authorities were not reduced to “toothless tigers” and they must be equipped with adequate infrastructure, empowered tribunals, and effective enforcement mechanisms so that their orders were implemented swiftly, in letter and spirit.

It said the Centre may also consider establishing a body corporate, on the lines of National Asset Reconstruction Company Ltd (NARCL) or otherwise, promoted by real estate/construction-focused PSUs or through public-private partnerships, to identify, take over and complete stalled projects under the Insolvency and Bankruptcy Code, 2016, framework.

“Unsold inventory from such projects could be utilised towards affordable housing schemes like PMAY (Pradhan Mantri Awas Yojana) or for government quarters, thereby addressing both the housing shortage and revival of sick projects,” it said.

With India rapidly industrialising and the rural-to-urban mobility proceeding at a lightning pace, the demand for housing has risen sharply., it said. “Yet, 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,” it said.

The top court said in some cases, construction has not even commenced despite full or substantial payment and the anxiety of not having a home despite paying a fortune is bound to take a serious toll on health, productivity and dignity.

“The Union government shall consider establishing a revival fund under NARCL or expanding the SWAMIH (Special Window for Affordable and Mid-Income Housing) Fund, to provide bridge financing for stressed projects undergoing CIRP (Corporate Insolvency Resolution Process), thereby preventing liquidation of viable projects and safeguarding homebuyer interests,” it said.

It directed that vacancies in NCLT/NCLAT be filled on a war footing, and dedicated IBC benches with additional strength should be constituted.

It also asked the Centre to file within three months a compliance report on measures taken to upgrade NCLT/NCLAT infrastructure nationwide. It said the recent closure of Chandigarh NCLT and portions of Delhi NCLT due to water seepage in courtrooms and chambers of members underscores the urgency of robust infrastructural support.

“Every residential real estate transaction for new housing projects shall be registered with local revenue authorities upon payment of at least 20 percent of the property cost by buyer/allottee,” it said.