Practice area

Stalled projects, takeover and builder insolvency

Remedies for allottees in abandoned projects, including takeover under Section 8 of RERA and insolvency proceedings against the builder.

When construction stops, buyers face a hard choice between waiting, seeking a refund and trying to complete the project themselves. The RERA Act and the Insolvency and Bankruptcy Code both offer routes, with very different effects.

What this work involves

• Takeover of a project under Section 8 of the RERA Act, where registration has lapsed or been revoked, including completion through a competent authority or an association of allottees
• Revocation of registration under Section 7, and its consequences
• Insolvency proceedings against the developer, where allottees are treated as financial creditors. The Supreme Court upheld this in Pioneer Urban Land and Infrastructure Ltd. v. Union of India (2019)
• Joint applications by allottees, which the Code requires to be made by at least a hundred allottees or ten percent of the allottees in the same project, whichever is less
• Choosing between RERA and the Code, since the best route depends on the project's finances
• Representation of allottees' committees

Frequently asked questions

Can buyers start insolvency proceedings against a builder?

Yes, subject to the Code's conditions. A joint application by the required number of allottees can be filed before the NCLT.

What happens to a project when its registration is revoked?

The Authority can take steps under Section 8, including arranging completion by a competent authority or an association of allottees.

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