Holding

Appellants are speculative investors and the 2019 Ordinance/2020 Amendment Act applies, so their Section 7 petitions are untenable.

Summary

The Supreme Court examined whether the appellants, who entered into buy‑back memoranda of understanding for residential units, were "speculative investors" and thus barred from filing Section 7 insolvency petitions, and whether the 2019 Insolvency and Bankruptcy Code (Amendment) Ordinance and the subsequent 2020 Amendment Act applied to their cases. The Court found that the MoUs were essentially investment contracts promising high returns with a buy‑back option, showing no intention to take possession, and therefore classified the appellants as speculative investors. It also held that the Ordinance/Amendment Act was applicable because the applications were pending when the legislation came into force, and the procedural requirements could not be retrospectively imposed. Consequently, the Court affirmed the NCLAT’s decision to set aside the Section 7 admissions and set aside the NCLAT’s finding of inapplicability of the Ordinance, while allowing the appellants to pursue other remedies. The Court issued extensive directions to strengthen the insolvency and real‑estate regulatory framework. All appeals were disposed of.

Issues considered

Whether the appellants qualify as "speculative investors" disqualifying them from initiating Section 7 proceedings under the IBC.
Whether the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019 and the 2020 Amendment Act, introducing threshold requirements for allottees, are applicable to the pending Section 7 applications.

Legislation cited

Constitution of Indias. Article 21
Insolvency and Bankruptcy Code, 2016s. 14, s. 5(8)(f), s. 65, s. 7
Insolvency and Bankruptcy Code (Amendment) Act, 2020
Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019
Negotiable Instruments Act, 1881s. 138
Real Estate (Regulation and Development) Act, 2016

Headnote

Issue for Consideration Whether the appellants, fall within the category of “speculative investors” so as to disentitle them from initiating proceedings u/s.7 of the IBC; whether the Ordinance/Amendment Act introducing threshold requirements for filing of s.7 IBC applications by the present case. Headnotes† Insolvency and Bankruptcy Code, 2016 – s.7 – NCLAT set aside the NCLT’s order and reversed the admission of the application filed u/s.7 by the appellants, holding that they were “speculative investors” and not genuine homebuyers/

Subjects

Speculative investorsSpeculative buyerNot genuine homebuyersThreshold requirements for filing of s.7 IBC applications by allotteesBuy-back agreementBuy-back clauseBuy-back planBuy-back contractFlats not deliveredConstruction never commencedPioneer Urban caseReal estate sectorRight to housingRight to life under Article 21Right to shelterCIRP proceedingsNCLATNCLTIBCRERA

Judgment

[2025] 10 S.C.R. 169 : 2025 INSC 1110

Mansi Brar Fernandes
v.
Shubha Sharma and Anr.
(Civil Appeal No. 3826 of 2020)
12 September 2025
[J.B. Pardiwala and R. Mahadevan,* JJ.]

Issue for Consideration
Whether the appellants, fall within the category of “speculative
investors” so as to disentitle them from initiating proceedings u/s.7
of the IBC; whether the Ordinance/Amendment Act introducing
threshold requirements for filing of s.7 IBC applications by allottees
was applicable to the facts of the present case.

Headnotes†
Insolvency and Bankruptcy Code, 2016 – s.7 – NCLAT set
aside the NCLT’s order and reversed the admission of the
application filed u/s.7 by the appellants, holding that they
were “speculative investors” and not genuine homebuyers/
financial creditors – Appellants, if fall within the category
of “speculative investors” disentitling them from initiating
proceedings u/s.7:
Held: 1.1 Yes – In C.A No. 3826 of 2020, the MoU executed
reveals that possession was never contemplated – The agreement
stipulated a buyback whereby Rs.35 lakhs invested would be
returned with an additional Rs.65 lakhs as premium within 12
months – Though four apartments were notionally “allotted”, the
appellant paid only Rs.35 lakhs with no provision for the balance –
Instead, the corporate debtor issued post-dated cheques of Rs.1
crore, which were repeatedly dishonoured – Successive extensions
of the MoU were granted without justification, and the appellant
invoked proceedings u/s.138, N.I. Act for recovery. [Para 18.5]
1.2 Thus, the appellant’s true interest lay in assured returns, not
possession – The MoU was in substance a buyback contract, not
an agreement to sell flats – By the standard in Pioneer Urban
case, the appellant was a speculative investor, disentitling her
from invoking s.7. [Para 18.5]

* Author
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1.3 Further, in C.A. No. 3903 of 2022, the MoU provided for an
investment of Rs.25 lakhs per unit with assured returns of 25%
per annum after 24 months – It contained a compulsory buyback
clause and provisions for profit-sharing over and above guaranteed
returns – The repeated use of the term “investment” coupled
with a risk-free exit option, confirms that possession was never
intended – While the NCLT admitted the appellant’s s.7 application
ex parte, the NCLAT correctly reversed the order – A homebuyer
cannot simultaneously demand refund with guaranteed returns
while retaining the option to refuse possession. [Para 18.6]
1.4 On the facts and law, both the appellants are speculative
investors – Their claims are in the nature of recovery, not insolvency
resolution – Findings of the NCLAT treating the appellants as
speculative investors upheld – Both impugned orders, setting
aside admission of the s.7 applications, affirmed. [Paras 18.7, 18.8]

Insolvency and Bankruptcy Code, 2016 – Insolvency and
Bankruptcy Code (Amendment) Ordinance, 2019 – IBC
(Amendment) Act, 2020 – Appellants in C.A. No. 540 of 2021
and C.A. No. 5495 of 2025 assailed the first impugned order
passed by NCLAT on the limited ground of non-compliance with
the 2019 Ordinance, promulgated on 28.12.2019 – Appellants
stated that the s.7 petition under the IBC filed by Respondent
No.1 on 02.01.2020, was reserved on 04.12.2019, i.e., prior
to the promulgation of the Ordinance – As on 28.12.2019,
the application was still pending consideration – Thus, the
Ordinance and the subsequent Amendment Act squarely
applied to the proceedings and the failure of Respondent
No.1 to satisfy the threshold requirement mandated under
the Ordinance was fatal to the maintainability of the petition –
NCLAT held that the Ordinance (later enacted as Amendment
Act, 2020) was inapplicable to the present case:
Held: Once orders were reserved, the appellant could not have
complied with the Ordinance until pronouncement – To insist
otherwise would be to compel the appellant to perform an
impossibility contrary to the maxim lex non cogit ad impossibilia –
The outcome on grounds of equity should be determined as on
the date the order was reserved, and no subsequent legislative
or administrative change should prejudice the parties – Where
orders were already reserved prior to the promulgation of the
Ordinance, the requirement cannot be retrospectively enforced
[2025] 10 S.C.R. 171

Mansi Brar Fernandes v. Shubha Sharma and Anr.

so as to defeat vested rights – The subsequent compliance by
the appellant during appellate proceedings sufficiently cures the
defect, and the act of the Court must not prejudice the litigant –
Therefore, the finding of the NCLAT in respect of the inapplicability
of the Ordinance/Amendment Act to the facts of the present case
requires interference, and the first impugned order is set aside to
that effect – Ordinance/Amendment Act is squarely applicable to
the facts of the present case. [Paras 19.6, 19.7]

Directions by Supreme Court – In the larger interests of
bona fide homebuyers and the stability of the real estate
sector – Insolvency and Bankruptcy Code, 2016 – Real Estate
(Regulation and Development) Act, 2016 (RERA) – Right to
shelter, an integral part of the right to life u/Art.21 of the
Constitution of India – Constitutional obligation of the state
to protect homebuyers:
Held: 1.1 Vacancies in NCLT / NCLAT shall be filled on a war
footing – Dedicated IBC benches with additional strength should
be constituted – Services of retired judges may be utilized on
ad hoc basis until regular appointments are mad – This Court is
cognizant of the fact that similar directions have been issued in
the past, including in Pioneer Urban case, but no effective step
has been taken on the ground. [Para 21.2]
1.2 The Union Government shall, within three months, file a
compliance report on measures taken to upgrade NCLT/NCLAT
infrastructure nationwide – The recent closure of Chandigarh
NCLT and portions of Delhi NCLT due to water seepage in the
Courtrooms and Chambers of Members underscores the urgency
of robust infrastructural support. [Para 21.2]
1.3 Within three months, a Committee chaired by a retired High
Court Judge shall be constituted, with representatives from the
Ministry of law, Ministry of Housing, domain experts in Real Estate,
Finance and IBC from NIUA, HUDCO’s HSMI, IIMs, NLUs, and
NITI Aayog, as well as two eminent industry representatives – The
Committee shall suggest commercially viable systemic reforms for
cleansing and infusing credibility into the real estate sector – NITI
Aayog/ NIUA shall provide research and secretarial support –
The Committee shall submit its report within six months of its
constitution. [Para 21.2]
1.4 States shall ensure that RERA authorities are adequately staffed
with infrastructure, experts, and resource – At least one member
172 [2025] 10 S.C.R.

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of every RERA must be a legal expert or consumer advocate
with proven expertise in real estate field – RERAs must conduct
thorough diligence before granting approval to any project – Failure
to do so, resulting in miscarriage of justice, shall amount to an
error unpardonable in law and may invite strict intervention by this
Court. [Para 21.2]
1.5 Since real estate is the second largest sector in IBC proceedings,
IBBI , in consultation with RERA authorities, shall constitute a council
to frame specific guidelines for insolvency proceedings in real
estate, including timelines for project-wise CIRP, and safeguards
for allottees. [Para 21.2]
1.6 Resolution of real estate insolvency should, as a rule, proceed
on a project-specific basis rather than the entire corporate debtor,
unless circumstances justify otherwise – This would protect solvent
projects and genuine homebuyers from collateral prejudice – IBBI
shall also devise a mechanism to enable handover of possession
to willing allottees where substantial units in a project are complete.
[Para 21.2]
1.7 The Union Government 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 –
SWAMIH Fund is a commendable initiative; however, being a large
fund involving public money, every rupee must be utilised strictly
for its intended purpose of last-mile financing – To prevent misuse,
directed that a comprehensive periodic performance audit by the
CAG be carried out, with reports placed in the public domain in a
form comprehensible even to laypersons. [Para 21.2]
1.8 Regulations shall ensure meaningful representation of allottees
in the CoC through authorized representatives, with safeguards
against conflicts of interest. [Para 21.2]
1.9 At the admission stage of s.7 petitions filed by allottees, NCLTs
must record a prima facie finding on whether the applicant is a
genuine homebuyer or speculative investor – This would prevent
unnecessary admissions and reduce docket burden. [Para 21.2]
1.10 The Government shall prioritize e-filing, video-conferencing,
and dedicated case management systems for IBC matters, in view
of the heavy caseload before NCLTs. [Para 21.2]
[2025] 10 S.C.R. 173

Mansi Brar Fernandes v. Shubha Sharma and Anr.

1.11 Every residential real estate transaction for new housing
projects shall be registered with local revenue authorities upon
payment of at least 20% of the property cost by buyer/allottee –
Further, to protect senior citizens and bona fide homebuyers,
contracts that significantly deviate from the Model RERA Agreement
to Sell, or that incorporate returns/buyback clauses where the
allottee is over the age of 50, must be supported by an affidavit
sworn before the competent Revenue Authority, certifying that the
allottee understands the attendant risks. [Para 21.2]
1.12 In projects at nascent stages, such as where land is yet to
be acquired or construction has not commenced, proceeds from
allottees shall be placed in an escrow account and disbursed in
phases aligned with project progress, as per a RERA-sanctioned
SOP – Every RERA shall devise such SOPs within six months
from today. [Para 21.2]
Insolvency and Bankruptcy Code, 2016 – Suggestions by
Supreme Court – To the Union Government, for future reform –
To protect the interests of genuine homebuyers; the economy
at large and fortify safeguards for bona fide homebuyers –
Real Estate (Regulation and Development) Act, 2016 (RERA).
[Para 21.2]

Insolvency and Bankruptcy Code, 2016 – Distinction between
speculative investors and genuine homebuyers – Role of
speculative investors in residential real estate – Speculative
investors cannot misuse the remedial framework of the
Insolvency and Bankruptcy Code:
Held: While investors are integral to any industry and their interests
warrant protection, speculative participants driven purely by
profit motives cannot be permitted to misuse the Insolvency and
Bankruptcy Code, which is a remedial framework conceived for
revival and the protection of sick companies and, in the case of
real estate, genuine homebuyers – Such investors have alternative
remedies under consumer law or RERA and even recourse to
Civil Courts in appropriate cases – To admit speculative claims
into insolvency proceedings would dilute the intelligible differentia
underlying the legislative scheme, destabilize the residential real
estate sector, and erode the social purpose embedded in housing
as a fundamental right. [Para 21]
Words and Phrases – “Speculation” and “Speculator” –
Definition – Discussed. [Para 18.4]
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Insolvency and Bankruptcy Code, 2016 – Objectives of the IBC –
Legislative recognition of homebuyers – Safeguards introduced
against speculative misuse – Discussed. [Paras 5 - 5.4]

Insolvency and Bankruptcy Code, 2016 – Criteria to identify
speculative investors – Determination of whether an allottee
is a speculative investor, must be holistic, having regard to
the terms of the agreement, the allotment letter, the payment
terms, and the overall conduct of the allottee:
Held: Criteria to identify speculative investors (i) expectation of
unusually high profits; and (ii) activity in the nature of business or
trade – Non-exhaustive indicators include: (1) If the agreement
substitutes possession with a buyback or refund option, or any other
special arrangement, the allottee is likely a speculative investor –
(2) Insistence on refund with high interest, coupled with refusal
to accept possession would indicate speculation – (3) Purchase
of multiple units, especially in double digits, shall invite greater
scrutiny, though it is not conclusive – If the terms of the agreement
provide for possession or refund in the event of failure to give
possession alone, this factor may not be held against the allottee –
(4) Special rights, preferential treatment, or unusual privileges to
the allottee would signal investment intent – (5) Deviation from
the RERA Model Agreement shall be a crucial indicator as to the
nature of the transaction-the greater the departure, the greater
the likelihood of speculation – (6) Unrealistic interest rates and
promises of 20-25% returns over a short duration are indicative
of speculation – However, the distinction between speculative
investors and genuine homebuyers is relevant only at the stage of
initiation of CIRP – Such allottees are not barred from filing claims
for the principal amount invested, or from pursuing remedies before
other fora in accordance with law. [Paras 18.4.4, 18.4.5, 18.4.6]

Case Law Cited
Pioneer Urban Land and Infrastructure Ltd v. Union of India [2019]
10 SCR 381 : (2019) 8 SCC 416 – relied on.
His Holiness Kesavananda Bharati Sripadagalavaru v. State of
Kerala [1973] Supp. 1 SCR 1; Swiss Ribbons v. Union of India
[2019] 3 SCR 535 : (2019) 4 SCC 17; Manish Kumar v. Union of
India [2021] 14 SCR 895 : (2021) 5 SCC 1; Madhubhai Amathalal
Gandhi v. The Union of India [1961] 1 SCR 191 : AIR 1961 SC 21;
[2025] 10 S.C.R. 175

Mansi Brar Fernandes v. Shubha Sharma and Anr.

Duni Chand Rataria v. Bhuwalka Brothers Ltd. [1955] 1 SCR
1071 : AIR 1955 SC 182; Jute Investment Co. Ltd v. CIT [1980]
1 SCR 902 : (1980) 1 SCC 117; Rameshwar Lal v. Municipal
Council Tank and Others [1996] Supp. 5 SCR 227 : (1996) 6
SCC 100; High Court Bar Association, Allahabad v. State of U.P.
and Others, MANU/SC/0149/2024; Jang Singh v. Brijlal [1964] 1
SCR 145 : AIR 1966 SC 1631; State of Punjab v. Shamlal Murari
[1976] 2 SCR 82 : AIR 1976 SC 1177; A.R. Antulay v. R.S. Nayak,
MANU/SC/0002/1988; Samatha v. State of A.P. [1997] Supp. 2
SCR 305: (1997) 8 SCC 191; Chameli Singh v. State of U.P [1995]
Supp. 6 SCR 827 : (1996) 2 SCC 549 – referred to.
Binani Industries Ltd v. Bank of Baroda (2018) 150 SCL 703;
Subha Sharma v. Mansi Brar Fernandes [decided on 17.11.2020
in Company Appeal (AT) (Insolvency) No. 83 of 2020]; Sushil
Ansal v. Ashok Tripathi Company Appeal (AT) (Ins) No. 452 of
2020 – referred to.
Alexander Rodger v. The Comptoir D’escompte De, Paris Law
Reports Vol. III 1869-71 page 465 at page 475 – referred to.

Books and Periodicals Cited
P. Ramanatha Iyer’s Law Lexicon (6th edition) – referred to.

List of Acts
Insolvency and Bankruptcy Code, 2016; Negotiable Instruments Act,
1881; Insolvency and Bankruptcy Code (Amendment) Ordinance,
2019; Real Estate (Regulation and Development) Act, 2016 (RERA);
Constitution of India; IBC (Amendment) Act, 2020.

List of Keywords
Speculative investors; Speculative buyer; Not genuine homebuyers;
Threshold requirements for filing of s.7 IBC applications by allottees;
Buy-back agreement; Buy-back clause; Buy-back plan; Buy-
back contract; Buy back agreement for flats; Flats not delivered;
Construction never commenced; Buy back the apartment; Pioneer
Urban case; Real estate sector; Right to housing; Right to life
under Article 21 of the Constitution of India; Right to shelter; CIRP
proceedings against the Corporate Debtor set aside; NCLAT set
aside the admission of the Section 7 application; Speculation;
Speculator; Speculative misuse; Bonafide homebuyers; Cheques
176 [2025] 10 S.C.R.

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dishonoured; CIRP proceedings; Profit from a lucrative agreement;
Expectation of unusually high profits; Threshold requirement
mandated under the Insolvency and Bankruptcy Code (Amendment)
Ordinance, 2019; Agreement substitutes possession with a buyback
or refund option; Insistence on refund with high interest; Refusal
to accept possession; Purchase of multiple units; Preferential
treatment; Unusual privileges to the allottee; Deviation from the
RERA Model Agreement; Unrealistic interest rates; Profit-sharing
over and above guaranteed returns; Recovery; Insolvency
resolution; Lex non cogit ad impossibilia; Stability of the real estate
sector; Model RERA Agreement to Sell; Actus curiae neminem
gravabit.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3826 of 2020
From the Judgment and Order dated 17.11.2020 of the National
Company Law Appellate Tribunal in CAAT(I) No. 83 of 2020
With
Civil Appeal Nos. 540 of 2021, 5495 of 2025, and 3903 of 2022

Appearances for Parties
Advs. for the Appellant:
Saurabh Mishra, Sr. Adv., Chandra Shekhar Yadav, Awanish Sinha,
Vineet Kumar, Ms. Harshita Gulati, Ms. Anindita Mitra, Akhil Anand,
Ms. Nupur Kumar, Ms. Diksha Dadu.
Advs. for the Respondents:
Ms. Nupur Kumar, Kaustubh Shukla, Ms. Pushpanjali Singh,
Praveen Kumar Singh, Ms. Harshita Gulati, Vineet Kumar, Vishal
Sinha, Ms. Anindita Mitra, Ms. Mantika Haryani, Ms. Astha Sharma,
Bhanu Mishra.

Judgment / Order of the Supreme Court

Judgment

R. Mahadevan, J.

1. There are four appeals, which, having been heard together, are
being disposed of by this common judgment.
[2025] 10 S.C.R. 177

Mansi Brar Fernandes v. Shubha Sharma and Anr.

2. The first three appeals, viz., C.A. No. 3826 of 2020, C.A. No. 540
of 2021, and C.A. No. 5495 of 2025 arise out of the final judgment
and order dated 17.11.20201 passed by the National Company Law
Appellate Tribunal, New Delhi2, in Company Appeal (AT) (Insolvency)
No. 83 of 2020. The fourth appeal, viz., C.A. No. 3903 of 2022, is
directed against the final judgment and order dated 12.08.20213
passed by the NCLAT in Company Appeal (AT) (Insolvency) No.1020
of 2019.
3. C.A. No. 3826 of 2020 has been preferred by the appellant – Mansi
Brar Fernandes in her capacity as a homebuyer / financial creditor.
Cross-appeals, viz., C. A. No. 540 of 2021 and C.A. No. 5495
of 2025 have been filed by Shubha Sharma and Ashlesh Gupta,
respectively – former and present directors of Gayatri Infra Planner
Private Limited – Respondent No. 2 / Corporate Debtor. C.A. No. 3903
of 2022 has been filed by the appellant – Sunita Agarwal, also a
homebuyer / financial creditor, against the Corporate Debtor Antriksh
Infratech Pvt. Ltd.
4. By the first impugned order dated 17.11.2020, the NCLAT reversed
the admission of the application filed under Section 7 of the
Insolvency and Bankruptcy Code, 20164 by the appellant – Mansi
Brar Fernandes, holding that she was a “speculative investor” and
not a genuine homebuyer / financial creditor. Following this, by its
second impugned order dated 12.08.2021, the NCLAT set aside the
admission of the Section 7 application filed by the appellant – Sunita
Agarwal, holding that she too fell within the category of “speculative
buyer” who sought to profit from a lucrative agreement. The directors of
the Corporate Debtor, in their cross-appeals, have further challenged
the first impugned order on the limited ground of non-applicability
of the Ordinance / Amendment Act to the facts of the present case.

PREFATORY
5. The Insolvency and Bankruptcy Code, 2016 (IBC) is a landmark
economic legislation enacted to consolidate and amend the laws
relating to reorganisation and insolvency resolution of corporate

1 For short, “the first impugned order”
2 For short, “the NCLAT”
3 For short, “the second impugned order”
4 For short, “the IBC”
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persons, partnership firms, and individuals in a time-bound manner. Its
primary objectives are the maximisation of value of assets, promotion
of entrepreneurship, availability of credit, and balancing of stakeholder
interests – creditors, investors, employees and workmen inter alia. Yet,
the IBC is also a highly misunderstood legislation. The nomenclature
of the Code itself has often contributed to this perception. In popular
imagination, the IBC is associated with bankruptcy and recovery of the
“last drop of life” from a company. But a closer look reveals that the
true character of the IBC lies not in its sombre title but in its design
and purpose. It privileges resolution over ruin, revival over decay, and
seeks to breathe life back into companies where revival is possible,
while providing for an orderly and dignified closure where it is not.
As emphasized by this Court in Swiss Ribbons v. Union of India5
and a catena of subsequent decisions, liquidation is not the primary
object of the Code, but a measure of last resort. The Code is designed
to revive and restructure distressed entities, so that they continue
as going concerns – safeguarding business continuity, protecting
employment, and maximising value of stakeholders.
5.1. Within this framework, the homebuyers occupy a distinct
position. Although their advances were, in substance, financial
contributions to real estate projects, they initially lacked
representation in the Committee of Creditors (CoC). To correct
this imbalance, Parliament amended the IBC to recognize
allottees as “financial creditors”, thereby ensuring that their
voices are represented in the resolution process. The legislative
intent was to protect genuine homebuyers, secure completion of
projects, and ensure delivery of homes. For such stakeholders,
liquidation rarely yields meaningful relief.
5.2. However, this amendment also gave rise to an unintended
consequence: a surge of individual Section 7 petitions, often filed
not by genuine homebuyers but by speculative investors seeking
premature exits or enhanced returns. Many of these applications
were aimed at holding promoters to ransom by threatening
commencement of the Corporate Insolvency Resolution Process.
Such misuse burdened the adjudicatory machinery, strained
the real estate sector, and stalled projects that could otherwise

5 (2019) 4 SCC 17
[2025] 10 S.C.R. 179

Mansi Brar Fernandes v. Shubha Sharma and Anr.

have been revived. To curb this mischief, through an ordinance
and subsequent amendment, Parliament introduced a threshold
requirement: at least 10% of the allottees or 100 in number
must act collectively to file a Section 7 application against a
real estate developer. This safeguard was designed to prevent
a handful of disgruntled or speculative investors from derailing
entire projects to the detriment of genuine homebuyers.
5.3. The residential real estate sector plays a systemic role in
the Indian economy. It is closely interlinked with banking,
steel, cement, and allied industries, and is among the largest
employment generators. Despite robust demand, the sector has
been plagued by delays, defaults, and lack of accountability,
leaving countless families without possession of homes despite
having invested their life savings. In this backdrop, this Court
has consistently reiterated that the IBC is not a recovery
mechanism or a bargaining chip for individual disputes. Rather,
it is a collective mechanism intended to revive viable projects
and safeguard the fundamental right to shelter of genuine
homebuyers.
5.4. With this prefatory discussion on the objectives of the IBC,
the legislative recognition of homebuyers, and the safeguards
introduced against speculative misuse, we now turn to the facts
of the present case.

BRIEF FACTS
6. The appellant (Mansi Brar Fernandes) and Respondent No. 2
(Gayatri Infra Planner Pvt. Ltd) had entered into a Memorandum of
Understanding (MoU) dated 06.04.2016 which a buy back agreement
for four flats in Gayatri Life at Plot No. 1F, Sector 16, Greater Noida
(West), Uttar Pradesh. She paid a sum of Rs.35,00,000/- via cheque
towards part consideration, and the MoU included a buy-back clause
exercisable solely at the discretion of the Corporate Debtor. If the
buy-back option was not exercised, the appellant was entitled to
receive possession of the flats without payment of any additional
amount. Despite the MoU having been extended twice (first on
07.04.2017 and second on 07.10.2017), neither flats were delivered,
nor payment made; and post-dated cheques worth Rs.1 crore
handed over by the Corporate Debtor, were returned dishonoured
upon presentation. The appellant thereafter initiated section 7 IBC
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proceedings in the capacity as an allottee / Financial Creditor, before
the National Company Law Tribunal, New Delhi6, besides initiating
the proceedings under Section 138 of the Negotiable Instruments
Act, 18817. The NCLT issued notice to the Corporate Debtor and
after detailed arguments, admitted the application vide order dated
02.01.2020. Challenging the same, Respondent No. 1 preferred an
appeal before the NCLAT, which allowed the appeal and set aside
the CIRP proceedings initiated by the appellant against the Corporate
Debtor, by the first impugned order.
7. The appellants in C.A. No. 540 of 2021 and C.A. No. 5495 of 2025
assail the first impugned order dated 17.11.2020 passed by the
NCLAT on the limited ground of non-compliance with the Insolvency
and Bankruptcy Code (Amendment) Ordinance, 2019, promulgated
on 28.12.2019. The appellants stated that the Section 7 petition
under the IBC filed by Respondent No. 1 (Mansi Brar Fernandes)
on 02.01.2020, was reserved on 04.12.2019, i.e., prior to the
promulgation of the Ordinance. As on 28.12.2019, the application
was still pending consideration. Consequently, the Ordinance and
the subsequent Amendment Act squarely applied to the proceedings.
It was urged that the failure of Respondent No. 1 to satisfy the
threshold requirement mandated under the Ordinance is fatal to the
maintainability of the petition.
7.1. The appellants further stated that specifically, the third proviso
to Section 7 IBC mandated compliance even for insolvency
applications filed by financial creditors that had not yet been
admitted by the Adjudicating Authority within thirty days of
the promulgation of the Ordinance / Amendment Act. In the
absence of such compliance, the proviso expressly deemed such
pending applications to have been withdrawn prior to admission.
Therefore, the finding of the NCLAT that the Ordinance was
inapplicable to the facts of the present case, is erroneous,
untenable, and unsustainable in law, and the admission order
was liable to be set aside on this ground alone.
7.2. The appellants also stated that compliance with the requirements
of the Ordinance / Amendment Act cannot be subsequently

6 For short, “the NCLT”
7 For short, “N.I. Act”
[2025] 10 S.C.R. 181

Mansi Brar Fernandes v. Shubha Sharma and Anr.

cured in appellate proceedings before the NCLAT. Hence, after
the Ordinance / Amendment Act, a Section 7 IBC petition could
not have been admitted by the Adjudicating Authority, unless
the statutory threshold prescribed for allottees to initiate CIRP
against a real estate project was met. The admission order
dated 02.01.2020, therefore, failed to give effect to the binding
mandate of the Ordinance / Amendment Act. Consequently, the
appellants submitted that the requirements of the Ordinance /
Amendment Act are squarely attracted, and to that extent, the
first impugned order of the NCLAT warrants interference by
this Court.
8. The facts of the case in CA. No. 3903 of 2022 are that Respondent
No. 2 (Antriksh Infratech Pvt. Ltd) approached the appellant (Sunita
Agarwal), and represented that they were in the process of developing
a housing project in the name and style of “Antriksh Urban Greek”
at L-Zone, Dwarka, New Delhi - 110 075. The appellant agreed to
invest a sum of Rs.25,00,000/- and paid the same by cheque dated
08.07.2015. Pursuant thereto, Respondent No. 2 issued letters dated
13.07.2015, stating that a 4BHK residential unit on the 6th floor,
admeasuring 2500 sq.ft. @ Rs. 5000/- per sq.ft., had been booked
in the name of the appellant under buy-back plan, and also issued
receipt No. 0492 dated 13.07.2015 acknowledging the payment of
Rs.25,00,000/-. On 28.07.2015, an Agreement / MoU was executed
between Respondent No.2 and the appellant. As per Clause 2(a)
of the Agreement, Respondent No. 2 admitted the payment of
Rs. 25,00,000/- and agreed to provide a return of 25% per annum
at the end of 24 months or upon the issuance of final LTC by the
competent authority, whichever was earlier. The 24-month period
ended on 07.07.2017.
8.1. Since construction was never commenced and, as reported
by the Insolvency Resolution Professional appointed by the
NCLT, even land had not been acquired by Respondent No. 2,
the appellant issued a demand notice/e-mail dated 01.02.2019
demanding a sum of Rs. 47,31,164.38 (comprising the principal
amount of Rs. 25,00,000/- plus interest @ 25% per annum till
08.02.2019). Respondent No. 2, however, refused to accept
the notice. The appellant also sent the notice through e-mail
on 01.02.2019.
182 [2025] 10 S.C.R.

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8.2. Thereafter, the appellant filed an application under Section 7
IBC before the NCLT. On 02.05.2019, the NCLT issued notice to
Respondent No. 2 and directed filing of an affidavit of service,
renotifying the case on 10.05.2019. The appellant served the
complete set of the petition and documents on Respondent
No. 2 through e-mail on 07.05.2019, and filed an affidavit of
service along with a certificate under Section 65B of the Indian
Evidence Act on 14.05.2019. Vide order dated 15.05.2019, the
NCLT directed that the matter proceed ex parte as Respondent
No. 2 failed to appear. Arguments were heard on 30.08.2019,
and by order dated 17.09.2019, the NCLT admitted the Section 7
IBC petition and appointed an Interim Resolution Professional
(IRP) to act in accordance with the Code.
8.3. Challenging the said order, Respondent No. 1 preferred
Company Appeal (AT) (Insolvency) No. 1020 / 2019 before the
NCLAT. In support, Respondent No. 1 relied upon the NCLAT
judgment dated 17.11.2020 in Subha Sharma v. Mansi Brar
Fernandes and others [Company Appeal (AT) (Insolvency) No.
83 of 2020] wherein, the NCLAT, referring to clauses of a similar
agreement, held that at the end of the stipulated period, the
corporate debtor was obliged to buy-back the apartment and
refund the amount along with premium, which was a lucrative
agreement for the investor, thereby making the allottee a
speculative investor. On this reasoning and applying the ratio
of this Court in Pioneer Urban Land and Infrastructure
Ltd v. Union of India8, the NCLAT by the second impugned
order dated 12.08.2021, set aside the NCLT’s admission order.
Aggrieved thereby, the appellant is before this Court with the
present appeal.

CONTENTIONS OF THE PARTIES
9. According to the learned senior counsel for the appellant, the appellant
(Mansi Brar Fernandes) is a homebuyer and qualifies as a financial
creditor under Section 5(8)(f) of the IBC. She entered into a MoU
dated 06.04.2016 with the Corporate Debtor (Gayatri Infra Planner
Pvt. Ltd) for the purchase / buy-back of four apartments in its project

8 (2019) 8 SCC 416
[2025] 10 S.C.R. 183

Mansi Brar Fernandes v. Shubha Sharma and Anr.

“Gayatri Life”, and paid a sum of Rs.35 lakhs through cheque as part
consideration. The MoU, which was commercially structured by the
Corporate Debtor itself, contained a buy-back clause that was entirely
at the option of the Corporate Debtor. It could either buy back the units
after 12 months for Rs.1 crore or hand over possession of the flats
to the appellant at no extra cost. The MoU was extended twice, i.e.,
on 07.04.2017 (for six months) and 07.10.2017 (for twelve months),
and all post-dated cheques issued by the Corporate Debtor for Rs.1
crore, were dishonoured upon presentation. Despite the expiry of the
final extension period on 06.10.2018, the Corporate Debtor failed
to hand over the flats or honour its buy-back commitment, thereby
constraining the appellant to initiate proceedings under Section 138
of the N.I.Act, and subsequently, file a Section 7 IBC petition.
9.1. Continuing further, it was submitted that the NCLT, by order dated
02.01.2020 admitted the petition, holding that the appellant was a
homebuyer / financial creditor under Section 5(8)(f), and that the
Corporate Debtor had committed default. However, on appeal,
the NCLAT reversed the admission, branding the appellant
as a speculative investor. The learned counsel submitted that
this finding is wholly erroneous, as it was based merely on the
existence of the buy-back clause, the dishonour of post-dated
cheques, and the appellant’s resort to remedies under the N.I.
Act. None of these, it was argued, demonstrate speculative
intent. On the contrary, the appellant never withdrew from the
MoU and was always willing to accept possession of the flats,
while the option of buy-back was solely with the Corporate
Debtor, not the appellant. The NCLAT’s approach, according
to the learned counsel, disregards the builder’s default and
unfairly penalise the homebuyer.
9.2. It was also submitted that the transaction clearly bears the
hallmarks of a financial debt, having the commercial effect of
borrowing and carrying the element of time value of money,
as recognized in the IBC. The sum of Rs.35 lakhs was duly
received by the Corporate Debtor, reflected in its financial
records, and is undisputed. The transaction is not alleged to
be preferential, undervalued, fraudulent, or extortionate under
Sections 43 to 50 IBC, and the appellant is not a related party
of the Corporate Debtor or its promoters. Reliance was placed
on the judgment of this Court in Pioneer Urban Land and
184 [2025] 10 S.C.R.

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Infrastructure Ltd v. Union of India (supra), wherein the 2018
amendment recognising homebuyers as financial creditors
was held to be clarificatory in nature. It was submitted that the
presence of a buy-back clause in the MoU does not exclude
a homebuyer from the purview of Section 5(8)(f), especially
where such clause was devised by the builder and not at the
instance of the allottee.
9.3. The learned senior counsel further pointed out that during the
pendency of the present appeal, another Section 7 IBC petition
filed by Amit Joshi and others against the same Corporate
Debtor was admitted by the NCLT on 28.03.2023 and a CIRP
is presently ongoing. The appellant has already submitted her
claim in those proceedings. She clarified that she does not
seek revival of her original Section 7 IBC petition, but only
challenges the erroneous finding of the NCLAT branding her
as a “speculative investor”, which prejudices her rights in the
ongoing CIRP and under other proceedings including those
under the N. I. Act.
9.4. In view of this subsequent CIRP, it was submitted that it is not
necessary for this Court to adjudicate on other issues raised
in the first impugned order, including the maintainability of her
Section 7 IBC application in light of the 2018 amendment to
the IBC requiring a threshold number of homebuyers to initiate
insolvency proceedings. For the same reason, the cross-appeals
preferred by Shubha Sharma and Ashlesh Gupta also do not
require consideration.
9.5. With these submissions, the learned senior counsel prayed that
the impugned finding of the NCLAT describing the appellant
as a “speculative investor” be set aside, she be recognised as
a homebuyer and financial creditor under Section 5(8)(f) IBC,
and she be treated at par with similarly situated allottees in the
ongoing CIRP in Amit Joshi (supra).
10. The learned counsel for the applicant in IA. No. 9936 of 2021 in C.A.
No. 3826 of 2020 / intervenor submitted that the applicant– Gayatri
Life Buyers Welfare Society – comprises allottees of the now-defunct
residential housing project “Gayatri Life” promoted by the corporate
debtor / Respondent No. 2. The members of the applicant who hold
89 apartment units in the said project, had supported the appellant –
[2025] 10 S.C.R. 185

Mansi Brar Fernandes v. Shubha Sharma and Anr.

Mansi Brar Fernandes – before the NCLAT by filing affidavits in
support of initiation of CIRP against the corporate debtor. They
continue to support the appellant / homebuyer in seeking admission
of the builder to insolvency proceedings. Therefore, there is material
and substantial compliance with the amendment introduced on 28th
December 2019 to Section 7 of the IBC, and the hyper-technical
objections taken by the corporate debtor in this regard merit rejection.
11. On behalf of Respondent No. 2 (Gayatri Infra Planner Private Limited),
the Resolution Professional made the following submissions:
(i) The appellant, claiming to be a financial creditor, seeks to rely
on a Memorandum of Understanding dated 06.04.2016, which
was purely provisional in nature and did not result in final
allotment. The appellant had paid Rs.35 lakhs out of a total
consideration of Rs.1,03,78,521/- for four flats and the MoU
provided the company a discretionary option to repurchase
the flats for Rs.1 crore within 12 months, failing which the
appellant would be entitled to possession. This optional buy-
back clause does not create any binding repayment obligation,
and therefore, does not constitute a “financial debt” under the
IBC. The appellant’s own case confirms that the buy-back was
at the sole discretion of the respondent, and no evidence has
been adduced to show that the company exercised the option
or agreed to repay Rs.1 crore. The transaction was clearly
speculative in nature, structured to yield an abnormal return
of over 350% within a short duration, reflecting an investment
for profit and not a genuine homebuying intent.
(ii) Furthermore, the appellant fully aware of the project’s
construction timeline, instead sought to recover money under the
garb of insolvency proceedings. As held in Pioneer Urban and
Infrastructure Ltd v. Union of India (supra), the IBC cannot be
used by speculative investors to initiate coercive proceedings.
Therefore, the appellant not being a financial creditor under
section 5(8)(f) had no locus to initiate CIRP, and the Admission
Order was rightly set aside. The first impugned order correctly
distinguishes the appellant as a “speculative investor” rather
than a genuine allottee, and upholds the principles underlying
the Code.
186 [2025] 10 S.C.R.

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(iii) The appellant is not a genuine allottee but a speculative investor
who entered into a transaction with the Corporate Debtor
purely for assured financial returns and not for the purpose
of acquiring residential property. A speculative allottee, as
recognized in law, is one who seeks short term gains through
devices like buy-back clauses and post-dated cheques (PDCs)
with no genuine intent to obtain possession or use the property
for residential purposes. In contrast, a genuine allottee under
section 5(8)(f) is a person who seeks a home for personal use
and falls within the protective ambit of the Code. In the present
case, the appellant was issued Post-dated cheques against the
investment made, a practice not followed in respect of genuine
homebuyers, thereby clearly indicating the speculative nature of
the transaction. The MoU executed between the appellant and
the Corporate Debtor included a buy-back clause offering the
appellant an exorbitant return of Rs.1 crore on an investment
of Rs.35 lakhs within 12 months, reflecting a commercial
arrangement rather than a residential purchase. The structure
of the MoU, absence of a builder-buyer agreement, lack of
follow-up for possession, and reliance on section 138 N.I. Act
proceedings all point to the appellant’s intent to profit financially
rather than obtain residential possession.
(iv) The NCLAT, in the first impugned order, rightly found that
the appellant was a speculative investor and not a genuine
allottee. It specifically observed that the MoU was a highly
lucrative agreement designed to yield massive returns with no
real obligation on the part of the appellant to pay the balance
amount for the flats. Further, the appellant never sought
possession during the term of the MoU, nor monitored the
project’s progress, thereby indicating the absence of genuine
buyer conduct. The transaction lacked the characteristics of
a real estate allotment protected under the IBC or the Real
Estate (Regulation and Development) Act, 2016 (RERA). The
appellant’s failure to produce any registered builder-buyer
agreement or other formal documentation also supports the
conclusion that the arrangement was speculative in nature.
(v) Moreover, the appellant’s attempt to use the IBC framework
only after dishonour of the PDCs and commencement of CIRP
[2025] 10 S.C.R. 187

Mansi Brar Fernandes v. Shubha Sharma and Anr.

proceedings reflects a coercive and opportunistic invocation
of the Code, which has been disapproved by this Court in
Pioneer Urban Land & Infrastructure Ltd v. Union of India
(supra), wherein, it was clearly held that speculative investors
cannot misuse the IBC for recovery of returns or enforcement
of investment contracts disguised as real estate allotments. The
present case squarely falls within that prohibition. Similarly, in
Binani Industries Ltd v. Bank of Baroda9, it has been reiterated
that the IBC is not a recovery mechanism for investors who
do not qualify as genuine stakeholders affected by insolvency.
(vi) The NCLAT, by order dated 17.11.2020 in Company Appeal
(AT)(Ins) No.83 of 2020, directed initiation of reverse CIRP
against Respondent No. 2, and the construction of the project
continues smoothly under IRP supervision.
(vii) The respondent company has always been ready and willing
to allot the four flats on a fully paid-up basis to the appellant,
which would entitle the appellant to take possession of the
same upon completion of construction. However, the appellant
was only interested in the premium of Rs.1 crore from the
respondent company, instead of delivery of the flats. That apart,
the appellant sought to encash the cheques and even filed a
complaint under section 138 of the N.I. Act.
(viii) Respondent No. 2 was admitted into Corporate Insolvency
Resolution Process (CIRP) on 28.03.2023, pursuant to an order
passed by the NCLT in C.P. (IB) No. 350/(PB)/2021, under
Section 7 IBC, whereupon a moratorium under Section 14
came into effect.
(ix) The Respondent company is currently undergoing CIRP, and
the construction is progressing under the supervision of the
IRP, who is ensuring that possession is handed over to genuine
homebuyers in a fair and lawful manner. The CoC proceedings
have been stayed by the NCLAT, and the project continues to
be developed smoothly. The appellant’s speculative claim, if
allowed, would upset the priority and fairness principle enshrined
in the Code and prejudice the rights of genuine homebuyers
and creditors.

9 (2018) 150 SCL 703
188 [2025] 10 S.C.R.

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(x) In view of the above submissions, it was prayed that the
appeal be dismissed, and the findings of the NCLAT -holding
the appellant to be a speculative investor not entitled to initiate
proceedings under section 7 of the IBC – be confirmed.
12. The learned senior counsel for the appellants in C.A. No. 540/2021
and C.A No. 5495 of 2025 assailed the finding of the NCLAT in
the first impugned order in respect of inapplicability of Ordinance /
Amendment Act, to the facts of the present case, on the following
grounds:
(i) The NCLAT erred in concluding that the provisions of the
Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019
(later enacted as Amendment Act, 2020) were inapplicable to the
present case. The Ordinance was promulgated on 28.12.2019,
prior to the NCLT’s admission order dated 02.01.2020. Hence,
its provisions squarely governed the present proceedings.
(ii) The Ordinance / Amendment Act does not envisage any carve-
out or exception in favour of real estate allottees. The statutory
threshold introduced by the amendment applies uniformly, and
an allottee is required to comply with the threshold requirement
before initiating proceedings under Section 7 IBC. The company
cannot be deprived of its right to insist on such compliance
before being subjected to CIRP.
(iii) The NCLAT erroneously assumed that this court’s interim
order in the earlier proceedings had the effect of staying the
Ordinance /Amendment Act. It failed to appreciate that the legal
effect of an interim order is entirely distinct from that of a stay
order. The statutory amendments remained fully operative and
binding at the relevant time.
(iv) The impugned order runs contrary to the plain language and
intent of the Ordinance / Amendment Act, which clearly applied
to the present case. The finding of inapplicability is legally
impermissible as well as factually unsustainable.
(v) This Court in Manish Kumar v. Union of India10 upheld the
constitutional validity of the Ordinance / Amendment Act and

10 (2021) 5 SCC 1
[2025] 10 S.C.R. 189

Mansi Brar Fernandes v. Shubha Sharma and Anr.

recognized the crucial importance of the threshold prescribed
for financial creditors who are allottees.
(vi) The respondent (Mansi Brar Fernandes), in her reply affidavit
before the NCLAT, effectively admitted non-compliance with
the statutory threshold. On this ground alone, the Section 7
application was liable to be rejected.
(vii) The appellants were deprived of their right to natural justice,
as they were not afforded an opportunity to rebut the filing of
the Section 7 application. This procedural lapse further vitiates
the impugned order.
(viii) On these grounds, it was submitted that the NCLAT’s finding on
the inapplicability of the Ordinance / Amendment Act is contrary
to law, unsustainable on facts, and liable to be set aside.
13. The learned senior counsel for the appellant in C.A. No. 3903 of
2022 submitted that Section 5(8)(f) was added by way of amendment
on 17.08.2018 with effect from 06.06.2018 under which the debt of
appellant comes within the definition of financial debt. The definition
of ‘allottee’ under 5(8)(f)(ii) is taken from RERA which under section
2(d) defines ‘allottee’. The appellant falls in the category of ‘allottee’.
The constitutional validity of section 5(8)(f) has been upheld by this
Court in Pioneer Urban Land Infrastructure Ltd and another v.
Union of India (supra).
13.1. It was further submitted that the finding of the NCLAT that as
the appellant entered into an MoU, the appellant becomes
“speculative investor” is patently illegal, as the MoU was
executed by both parties and they remain bound by that. The
appellant has not changed her stand depending upon the market
conditions and therefore, by no stretch of imagination, she is
“speculative investor” as parties are bound by definitive terms.
13.2. It was also submitted that the second impugned order was
passed ignoring the interim order dated 11.12.2020 passed
by this Court in C.A. No. 3826/2020 [Mansi Brar Fernandes v.
Shubha Sharma and another]. Moreover, the corporate debtor
is admittedly, withholding the money of the appellant since
13.07.2015 and did not deliver the promised unit.
13.3. The learned senior counsel further submitted that vide orders
dated 01.10.2019, 13.11.2019 and 19.11.2019, the NCLAT had
190 [2025] 10 S.C.R.

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recorded the submissions of the IRP that “there is no land for
project”. In these circumstances, the second impugned order
is liable to be set aside.

ANALYSIS AND FINDINGS
14. We have heard the learned senior counsel appearing for all the
parties, and perused the materials available on record.
14.1. This Court by order dated 11.12.2020 in Civil Appeal No. 3826
of 2020, granted an ad-interim direction to the effect that the
finding of the National Company Law Appellate Tribunal that
the appellant is a ‘speculative investor’ is confined to the facts
of the present case and shall not be treated as a precedent
in any other case for the present.
15. The present matter, though seemingly straightforward, provides this
Court with a timely occasion to clarify and reaffirm key principles
under the Insolvency and Bankruptcy Code, 2016, particularly on
the role of speculative investors in residential real estate. While
subsequent legislative amendments have sought to address this
concern, uncertainty persists in pending matters before Tribunals. A
clear pronouncement at this stage will eliminate inconsistency, prevent
conflicting orders, and bring stability to a sector vital significance to
the Indian middle class.
15.1. This case also raises a jurisprudential concern: the manner
in which litigants may be protected from prejudice caused
by changes in law or external factors arising after hearings
conclude, but before judgment is delivered. Courts and Tribunals
across the country are grappling with an ever-increasing
docket explosion. While such a surge indicates greater citizen
engagement with the justice system, it also results in orders
being reserved for longer than desirable. Though Courts
ordinarily take judicial notice of subsequent changes in law,
the failure to do so should not operate to the detriment of any
party. In the context of the present case, Article 21 demands
that bona fide homebuyers receive expeditious and effective
redressal before the designated fora, including the Consumer
Commissions, NCLT, NCLAT, and RERA11.

11 Upendra Choudhury v. Bulandshahar Development Authority and Others (2022) 11 SCC 449
[2025] 10 S.C.R. 191

Mansi Brar Fernandes v. Shubha Sharma and Anr.

15.2. In this necessary in this backdrop to reiterate certain settled
principles:
• RERA remains the primary forum for redressal of
homebuyers’ grievances;
• The IBC is a forum of last resort, intended to secure
revival and completion of viable projects, not to serve
as a debt recovery mechanism; and
• Consumer forums should confine themselves to
adjudicating individual service deficiencies, thereby
avoiding conflicting or overlapping orders across multiple
fora.
15.3. The decision of this Court in Pioneer Urban Land and
Infrastructure Ltd v. Union of India (supra) drew a distinction
between speculative investors and genuine homebuyers. The
present case affords an opportunity to reinforce that distinction
through a principled intelligible differentia, so as to protect bona
fide homebuyers, deter misuse of the Code by speculative
investors, and prevent dishonest developers from exploiting
systemic loopholes.
15.4. Strict adherence to IBC timelines and settled precedent is
imperative to realise two complementary objectives:
(i) ensuring revival and completion of stalled projects for
the benefit of genuine homebuyers; and
(ii) curbing speculative activity which has functioned as a
“slow poison” for the residential real estate sector and,
by extension, the Indian middle class.
15.5. A balanced judicial approach in this regard will have far-reaching
benefits: protecting homebuyers, restoring confidence in the
real estate market, and encouraging reputed business houses
and conglomerates to participate in residential development.
In taking this approach, this Court seeks to contribute towards
cleansing and strengthening a core economic sector that
sustains millions of livelihoods in both the organised and
unorganised economy and touches the lives of people at their
most fundamental level.
192 [2025] 10 S.C.R.

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16. In the present case, as indicated above, there are two impugned
orders, whereby the NCLAT set aside the admission of Section 7
IBC applications by the NCLT, holding that the appellants in C.A.
No. 3826 of 2020 and 3903 and 2022 viz., Mansi Brar Fernandes
and Sunita Agarwal, respectively, were “speculative investors”.
Further, in the first impugned order, the NCLAT held that the statutory
requirements introduced by the Ordinance / Amendment Act were not
applicable to the facts of the present case. It is however, undisputed
that Section 7 IBC application filed by one Amit Joshi was admitted
by the NCLT and that the CIRP is presently ongoing against the
Corporate Debtor – Gayatri Infra Planner Pvt. Ltd.
17. In light of these facts, the following issues arise for consideration
in these appeals:
(i) Whether the appellants, Mansi Brar Fernandes and Sunita
Agarwal, fall within the category of “speculative investors” so
as to disentitle them from initiating proceedings under Section 7
of the IBC?
(ii) Whether the Ordinance / Amendment Act introducing threshold
requirements for filing of Section 7 IBC applications by allottees
was applicable to the facts of the present case?
18. Issue No.1 – Speculative Investors
18.1. The determination of whether an allottee is a speculative
investor depends on the facts of each case. The inquiry must
be contextual and guided by the intent of the parties. Indicative
factors include: (i) the nature and terms of the contract; (ii) the
number of units purchased; (iii) presence of assured returns
or buyback clauses; (iv) the stage of completion of the project
at the time of investment; and (v) existence of alternative
arrangements in lieu of possession. Possession of a dwelling
unit remains the sine qua non of a genuine homebuyer’s intent.

Speculation in real estate and Pioneer Urban
18.2. The problem of speculative misuse of real estate agreements
has long been recognised. Such speculative arrangements
artificially inflate demand, fuel asset bubbles, and prejudice
genuine buyers. Unlike financial markets – where speculation
may sometimes serve a liquidity function – speculation in
[2025] 10 S.C.R. 193

Mansi Brar Fernandes v. Shubha Sharma and Anr.

residential housing undermines stability, fairness, and the very
object of housing development. Schemes of assured returns,
compulsory buybacks, or excessive exit options are in truth
financial derivatives masquerading as housing contracts. These
arrangements enable developers, on the one hand, to mislead
gullible individuals, and seasoned investors, on the other, to
‘jump ship’ when the market turns or to hold developers to
ransom by invoking the IBC as a coercive recovery mechanism,
thereby creating a situation of ‘heads I win, tails you lose’.
This Court, in Madhubhai Amathalal Gandhi v. the Union
of India12 while deprecating speculative activities in the stock
market, strongly cautioned against such distortions, observing:
“These mischievous potentialities inherent in the
transactions, if left uncontrolled, would tend to subvert
the main object of the institution of stock exchange
and convert it into a den of gambling which would
ultimately upset the industrial economy of the country”.
18.3. This Court in Pioneer Urban Land and Infrastructure Ltd v.
Union of India (supra), while upholding the constitutional
validity of the 2018 amendment recognising allottees
as financial creditors, drew a crucial distinction between
genuine homebuyers and speculative investors. It clarified
that speculative investors cannot be permitted to misuse the
Code as a debt recovery mechanism. The judgment struck a
balance: ensuring representation of genuine homebuyers in
the CoC, while shielding developers and projects from being
derailed by investors who never intended to take possession.
18.3.1. The Court further noted that remedies under RERA
and the Consumer Protection Act are additional,
not exclusive. Both statutes operate alongside the
IBC, but with distinct purposes: RERA protects
individual investors by enforcing compliance with
project obligations, while the IBC operates in rem to
revive the corporate debtor and maximise value for
all stakeholders.

12 AIR 1961 SC 21
194 [2025] 10 S.C.R.

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18.3.2. Importantly, Pioneer Urban held that once a prima
facie default is established under Section 7 of
the Code, the burden shifts onto the developer to
demonstrate that the applicant is a defaulter, or that
the process has been invoked fraudulently, with
malicious intent, or by a speculative investor. These
safeguards were intended to prevent “trigger-happy”
investors from destabilising projects or prematurely
driving developers into insolvency.
18.3.3. For better appreciation, the relevant paragraph of
the said decision is reproduced below:
“56. It can thus be seen that just as information
utilities provide the kind of information as to
default that banks and financial institutions
are provided under Sections 214 to 216 of
the Code read with Regulations 25 and 27
of the Insolvency and Bankruptcy Board of
India (Information Utilities) Regulations, 2017,
allottees of real estate projects can come
armed with the same kind of information, this
time provided by the promoter or real estate
developer itself, on the basis of which, prima
facie at least, a “default” relating to amounts
due and payable to the allottee is made out in
an application under Section 7 of the Code. We
may mention here that once this prima facie case
is made out, the burden shifts on the promoter/
real estate developer to point out in their reply
and in the hearing before NCLT, that the allottee
is himself a defaulter and would, therefore, on
a reading of the agreement and the applicable
RERA Rules and Regulations, not be entitled
to any relief including payment of compensation
and/or refund, entailing a dismissal of the said
application. At this stage also, it is important
to point out, in answer to the arguments made
by the petitioners, that under Section 65 of the
Code, the real estate developer can also
point out that the insolvency resolution
[2025] 10 S.C.R. 195

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process under the Code has been invoked
fraudulently, with malicious intent, or for
any purpose other than the resolution of
insolvency. This the real estate developer
may do by pointing out, for example, that
the allottee who has knocked at the doors
of NCLT is a speculative investor and not
a person who is genuinely interested in
purchasing a flat/apartment. They can
also point out that in a real estate market
which is falling, the allottee does not, in
fact, want to go ahead with its obligation to
take possession of the flat/apartment under
RERA, but wants to jump ship and really
get back, by way of this coercive measure,
monies already paid by it. Given the above,
it is clear that it is very difficult to accede to
the petitioners’ contention that a wholly one-
sided and futile hearing will take place before
NCLT by trigger-happy allottees who would
be able to ignite the process of removal of
the management of the real estate project
and/or lead the corporate debtor to its death.”

Criteria to identify speculative investors
18.4. “Speculation” has been defined in P. Ramanatha Iyer’s Law
Lexicon (6th edition) as “a risky investment of money for
the sake of and in expectation of unusually large profits”.
A “speculator” is “one who practices speculation in trade or
business”. Two elements emerge: (i)expectation of unusually
high profits; and (ii)activity in the nature of business or trade.
These elements accord with the ratio of Pioneer Urban, which
described speculative investors as those seeking refund or
profit without an intention to occupy.
18.4.1. In Duni Chand Rataria v. Bhuwalka Brothers Ltd.13
this Court considered the validity of an ordinance

13 AIR 1955 SC 182
196 [2025] 10 S.C.R.

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of the State of West Bengal prohibiting speculative
transactions in the jute trade. A Constitution Bench
(four Judges) held that constructive delivery by
intermediate parties would be valid provided that it
culminated in actual delivery to the end purchaser.
The Court observed:
“The mate’s receipts or the delivery orders
as the case may be, represented the goods.
The sellers handed over these documents
to the buyers against cash payment ….The
constructive delivery of possession which was
obtained by the intermediate parties was thus
translated into a physical or manual delivery of
possession in the ultimate analysis eliminating
the unnecessary process of each of the
intermediate parties taking and in his turn giving
actual delivery of possession of the goods …..”
Thus, where there is an actual chain of delivery ending
with possession by a genuine buyer, the transaction
is not speculative. Conversely, in the present context,
where there is no intention to take possession, the
onus to find another buyer and effect resale is cast on
the developer. Delivery in such cases is more in the
nature of a lien or an option. For a genuine allottee,
however, delivery and possession are a sine qua non.
18.4.2. In Jute Investment Co. Ltd v. CIT14, this Court
held that for a transaction to fall outside the ambit of
“speculative” under the Income-tax Act, 1961, actual
delivery of the commodity is essential. By analogy,
where an allottee has no intention to take delivery
of the unit, the arrangement assumes the character
of a speculative transaction.
18.4.3. Pioneer Urban (supra), in para 56, defines a
speculative investor as one who intends to evade
possession and “jump ship”, or one who is not

14 (1980) 1 SCC 117
[2025] 10 S.C.R. 197

Mansi Brar Fernandes v. Shubha Sharma and Anr.

genuinely interested in purchasing a flat / apartment.
Any allottee, who, from the inception of the agreement,
does not intend to take possession, or who later
abandons such intent, falls within this category. Such
an allottee is primarily concerned with refund or profit,
and not with completion of the project.
18.4.4. Thus, the determination of whether an allottee is a
speculative investor, must be holistic, having regard
to the terms of the agreement, the allotment letter, the
payment terms, and the overall conduct of the allottee.
18.4.5. Non-exhaustive indicators include:
(1) If the agreement substitutes possession with a
buyback or refund option, or any other special
arrangement, the allottee is likely a speculative
investor.
(2) Insistence on refund with high interest, coupled
with refusal to accept possession would indicate
speculation.
(3) Purchase of multiple units, especially in double
digits, shall invite greater scrutiny, though it is
not conclusive. If the terms of the agreement
provide for possession or refund in the event
of failure to give possession alone, this factor
may not be held against the allottee.
(4) Special rights, preferential treatment, or unusual
privileges to the allottee would signal investment
intent.
(5) Deviation from the RERA Model Agreement
shall be a crucial indicator as to the nature of
the transaction – the greater the departure, the
greater the likelihood of speculation.
(6) Unrealistic interest rates and promises of
20 – 25% returns over a short duration are
indicative of speculation.
18.4.7. However, it must be clarified that the distinction
between speculative investors and genuine
198 [2025] 10 S.C.R.

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homebuyers is relevant only at the stage of initiation of
CIRP. Such allottees are not barred from filing claims
for the principal amount invested, or from pursuing
remedies before other fora in accordance with law.

Application to the present appeals viz., C.A. Nos. 3826 of 2020
and 3903 of 2022
18.5. In C.A No. 3826 of 2020 (Mansi Brar Fernandes), the MoU
executed reveals that possession was never contemplated.
The agreement stipulated a buyback whereby Rs. 35 lakhs
invested would be returned with an additional Rs.65 lakhs
as premium within 12 months. Though four apartments were
notionally “allotted”, the appellant paid only Rs. 35 lakhs
with no provision for the balance. Instead, the corporate
debtor issued post-dated cheques of Rs. 1 crore, which were
repeatedly dishonoured. Successive extensions of the MoU
were granted without justification, and the appellant invoked
proceedings under Section 138 of the N.I. Act for recovery.
These circumstances make clear that the appellant’s true
interest lay in assured returns, not possession. The MoU was
in substance a buyback contract, not an agreement to sell
flats. By the standard in Pioneer Urban, the appellant was a
speculative investor, disentitling her from invoking Section 7.
18.6. In C.A. No. 3903 of 2022 (Sunita Agarwal), the MoU dated
28.02.2015 provided for an investment of Rs. 25 lakhs per
unit with assured returns of 25% per annum after 24 months.
It contained a compulsory buyback clause and provisions
for profit-sharing over and above guaranteed returns. The
repeated use of the term “investment” coupled with a risk-free
exit option, confirms that possession was never intended.
While the NCLT admitted her Section 7 application ex parte,
the NCLAT correctly reversed the order. As this Court has
observed, a homebuyer cannot simultaneously demand
refund with guaranteed returns while retaining the option to
refuse possession. Such risk-free contracts place speculative
investors in an advantageous position, to the detriment of
genuine homebuyers and developers.
18.6.1. The reliance placed by the NCLAT on its earlier
decision in Subha Sharma v. Mansi Brar Fernandes
[2025] 10 S.C.R. 199

Mansi Brar Fernandes v. Shubha Sharma and Anr.

[decided on 17.11.2020 in Company Appeal (AT)
(Insolvency) No. 83 of 2020], despite interim order of
this Court, does not vitiate its reasoning. An interim
order suspends enforcement between parties, but
does not efface the declaration of law or reasoning
in a judgment. Unless specifically overruled, such
reasoning remains available for guidance, particularly
when judicial discipline demands consistency in
sensitive sectors such as real estate.
18.7. On the facts and law, it is evident that both appellants are
speculative investors. Their claims are in the nature of
recovery, not insolvency resolution. Consistent with Pioneer
Urban, speculative investors cannot be permitted to trigger
CIRP as this would undermine revival, destabilise projects,
and prejudice genuine homebuyers.
18.8. Accordingly, the findings of the NCLAT treating the appellants
as speculative investors warrant no interference. Both impugned
orders, setting aside admission of the Section 7 applications,
stand affirmed. However, liberty is reserved to the appellants
to pursue their remedies before appropriate fora in accordance
with law. In such proceedings, the bar of limitation shall not
apply, in line with settled jurisprudence of this Court15.

Issue No. 2 – Applicability of Ordinance / Amendment Act to the
facts of the present case (Mansi Brar Fernandes)
19. Section 7 IBC, as amended by the Insolvency and Bankruptcy Code
(Amendment) Ordinance, 2019, enforced with effect from 28.12.2019,
added a proviso to sub-section (1) before the explanation, providing
a threshold limit for initiation of CIRP at the instance of allottees
under a real estate project. It mandated that an application shall be
filed jointly by not less than 100 allottees or not less than 10% of the
total number of such allottees under the same real estate project,
whichever is less. It further provided that where an application for
initiating the CIRP against a corporate debtor had been filed by such
financial creditors and had not been admitted by the adjudicating
authority before commencement of the IBC (Amendment) Act, 2020,

15 Rameshwar Lal v. Municipal Council Tank and Others (1996) 6 SCC 100
200 [2025] 10 S.C.R.

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such application was required to be modified to comply with the said
requirement within thirty days of commencement of the Act, failing
which it would be deemed to be withdrawn before its admission.
19.1. In the present case, the appellant filed a Section 7 application
against the corporate debtor on 18.03.2019. On 28.12.2019,
when the Ordinance was promulgated, the application was still
pending before the Adjudicating Authority. However, arguments
had already been heard and the matter reserved for orders
on 04.12.2019. The order came to be passed on 02.01.2020,
admitting the application without reference to the Ordinance.
At that stage, the requirement introduced by the Ordinance
had not been complied with by the appellant. Nevertheless,
she subsequently complied with the said requirement in the
appellate proceedings.
19.2. The NCLAT relied upon the coordinate Bench decision in
Sushil Ansal v. Ashok Tripathi in Company Appeal (AT)
(Ins) No. 452 of 2020, wherein reliance was placed on the
interim order of this Court dated 13.01.2020 passed in Manish
Kumar v. Union of India, and observed that the provisions of
section 7 as they stood prior to the amendment continued to
occupy the field. Proceeding on that basis, NCLAT concluded
that the IBC Amendment Ordinance, 2019 (later replaced by
the IBC Amendment Act, 2020) had no effect on the present
proceedings. However, such reasoning was erroneous in
the facts of the instant case. It is pertinent to note here that
the appellant’s application had already been admitted on
02.01.2020, prior to the status quo order of this court dated
13.01.2020, whereas the Section 7 application filed by Sushil
Ansal was admitted only on 17.03.2020. Thus, while the
decision in Sushil Ansal was correct on its own facts, NCLAT
wrongly applied it in Mansi Brar.
19.3. In the present case, limitation was due to expire on 27.01.2020.
Even if computation is reckoned from 02.01.2020 (the date of
reopening of the NCLT after the winter recess), the limitation
period would have run its course by 31.01.2020. Although the
affidavits bear the date 27.01.2020, the undisputed position
is that they were actually filed before the NCLAT only on
01.02.2020, by which time the limitation period had already
lapsed. Consequently, the appellant had no option but to
[2025] 10 S.C.R. 201

Mansi Brar Fernandes v. Shubha Sharma and Anr.

comply with the requirements of the Ordinance which had come
into effect on 28.12.2019. However, it was incumbent upon
the NCLT to take cognizance of the Ordinance and afford an
opportunity to the appellant to meet its stipulations. Since no
such opportunity was granted, the appellant had no occasion
to comply before the NCLT.
19.4. Indeed, even the respondents have contended that the
NCLT ought to have deferred the admission order in light
of the Ordinance. Though no specific objection was raised
on 02.01.2020 by the Director / Respondent No. 1 or the
Corporate Debtor / Respondent No. 2, the failure to consider the
Ordinance was essentially an act of the Court. For such an act,
no party can be prejudiced. The appellant, in fact, succeeded
in obtaining the consent of 10% of allottees in compliance with
the Ordinance, albeit with slight delay. The provision being
procedural in nature and not affecting substantive rights, no
prejudice has been caused to the respondents.
19.5. This situation exemplifies the doctrine of Actus Curiae Neminem
Gravabit – that an act of the Court shall prejudice no one.
Where prejudice arises solely because of a judicial act,
such as reserving orders without accounting for a legislative
change, the Court must neutralise the effect so that no party
suffers. As Benches of this Court of various strengths have
consistently held in a catena of decisions in High Court Bar
Association, Allahabad v. State of U.P. and others16, Jang
Singh v. Brijlal17 and State of Punjab v. Shamlal Murari18,
inter alia, no litigant can be penalised for delay, mistake, or
inadvertence of the Court. In the words of the great judicial
maverick, Justice V.R. Krishna Iyer, in Shamlal Murari (supra):
“Where the non-compliance, the procedural, will
thwart fair hearing or prejudice doing of justice to
parties, the rule is mandatory. But, grammar apart,
if the breach can be corrected without injury to a
just disposal of the case, we should not enthrone a

16 MANU/SC/0149/2024
17 AIR 1966 SC 1631
18 AIR 1976 SC 1177
202 [2025] 10 S.C.R.

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regulatory requirement into a dominant desideratum.
After all, Courts are to do justice, not to wreck this
end product on technicalities.
Viewed in this perspective, even what is regarded
as mandatory traditionally may, perhaps, have to be
moderated into wholesome directions to be complied
with in time or in extended time.”
19.6. In the present case, once orders were reserved, the
appellant could not have complied with the Ordinance until
pronouncement. To insist otherwise would be to compel the
appellant to perform an impossibility – contrary to the maxim
lex non cogit ad impossibilia. It would be apt to reproduce the
words of Lord Cairns in Alexander Rodger v. The Comptoir
D’escompte De Paris19, as quoted in A.R. Antulay v. R.S.
Nayak20 wherein, it was observed thus:
“Now, their Lordships are of opinion, that one of the
first and highest duties of all Courts is to take care
that the act of the Court does no injury to any of the
suitors. And when the expression ‘the act of the
Court’ is used, it does not mean merely the act of
the primary Court, or of any intermediate Court of
appeal, but the act of the Court as a whole, from
the lowest Court which entertains jurisdiction over
the matter up to the highest Court which finally
disposes of the case. It is the duty of the aggregate
of those Tribunals, if I may use the expression, to
take care that no act of the Court in the course of
the whole of the proceedings does an injury to the
suitors in the Court.”
19.7. Accordingly, the outcome on grounds of equity should be
determined as on the date the order was reserved, and
no subsequent legislative or administrative change should
prejudice the parties. In conclusion, while the validity of
the threshold requirement introduced by the Ordinance has

19 Law Reports Vol. III 1869-71 page 465 at page 475
20 MANU/SC/0002/1988
[2025] 10 S.C.R. 203

Mansi Brar Fernandes v. Shubha Sharma and Anr.

been upheld by this court in Manish Kumar v. Union of
India (supra), its application must necessarily depend on the
stage of proceedings and the feasibility of compliance. Where
orders were already reserved prior to the promulgation of the
Ordinance, the requirement cannot be retrospectively enforced
so as to defeat vested rights. The subsequent compliance by
the appellant during appellate proceedings sufficiently cures
the defect, and the act of the Court must not prejudice the
litigant. Therefore, the finding of the NCLAT in respect of the
inapplicability of the Ordinance / Amendment Act to the facts of
the present case requires interference, and the first impugned
order deserves to be set aside to that effect. Accordingly, this
issue is answered by us.

R I G H T T O S H E LT E R A S A F U N D A M E N TA L R I G H T:
CONSTITUTIONAL OBLIGATION OF THE STATE TO PROTECT
HOMEBUYERS
20. This Court has, in a catena of decisions, consistently held and
reaffirmed that the Right to Shelter is an integral part of the right
to life under Article 21 of the Constitution. This recognition casts
a corresponding duty on the State to ensure access to adequate
housing, particularly for weaker sections. Indeed, various welfare
schemes such as the Pradhan Mantri Awas Yojana (PMAY) have
been initiated by the Government to provide affordable housing.
20.1. 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. With India rapidly industrialising
and the rural-to-urban mobility proceeding at lightening pace,
the demand for housing has risen sharply.
20.2. 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. In some cases, construction has not even commenced
despite full or substantial payment. An average homebuyer may
be a teacher, lawyer, doctor, IT professional, or a government
employee, who has poured his or her hard-earned money into
204 [2025] 10 S.C.R.

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the pockets of a developer. For such individuals, a stable roof
over their family’s head is all they desire. The anxiety of not
having a home despite paying a fortune is bound to take a
serious toll on health, productivity, and dignity.
20.3. It is therefore imperative that the life savings of a common
person culminate in timely possession of their promised home.
Article 21 would mandate nothing less. In Samatha v. State of
A.P.21, this Court reiterated that the right to social and economic
justice as well as the right to shelter are fundamental rights
encompassed within the ambit of the right to life. Similarly, in
Chameli Singh v. State of U.P.22, this Court observed:
“Shelter for a human being, therefore, is not a mere
protection of his life and limb. It is home where he has
opportunities to grow physically, mentally, intellectually
and spiritually. Right to shelter, therefore, includes
adequate living space, safe and decent structure,
clean and decent surroundings, sufficient light, pure
air and water, electricity, sanitation and other civic
amenities like roads etc. so as to have easy access
to his daily avocation. The right to shelter, therefore,
does not mean a mere right to a roof over one’s
head but right to all the infrastructure necessary to
enable them to live and develop as a human being.
Right to shelter when used as an essential requisite
to the right to live should be deemed to have been
guaranteed as a fundamental right. As is enjoined in
the Directive Principles, the State should be deemed
to be under an obligation to secure it for its citizens,
of course subject to its economic budgeting. In a
democratic society as a member of the organised
civic community one should have permanent shelter
so as to physically, mentally and intellectually equip
oneself to improve his excellence as a useful citizen
as enjoined in the Fundamental Duties and to be a
useful citizen and equal participant in democracy.

21 (1997) 8 SCC 191
22 (1996) 2 SCC 549
[2025] 10 S.C.R. 205

Mansi Brar Fernandes v. Shubha Sharma and Anr.

The ultimate object of making a man equipped with
a right to dignity of person and equality of status is to
enable him to develop himself into a cultured being.
Want of decent residence, therefore, frustrates the
very object of the constitutional animation of right
to equality, economic justice, fundamental right to
residence, dignity of person and right to live itself.”
20.4. Thus, it would be thoroughly erroneous to treat home-buying
as a mere commercial transaction, or worse, to reduce housing
to the status of speculative instruments such as stocks,
debentures, futures, or options through creative contractual
devices. Housing is neither a luxury nor a commodity for
speculation – it is a fundamental human need. The right to
secure, peaceful, and timely possession of one’s home is
therefore a facet of the fundamental right to shelter enshrined
under Article 2123.
20.5. 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 jeopardize the
interests of genuine end-users.
20.6. Comparative experience from Western countries demonstrates
the dangers of unchecked speculation. Despite smaller
populations, several nations face acute housing shortages,
prompting measures such as restrictions on the number of
houses an individual may own. India must ensure, through
robust policies and strict enforcement, that such a crisis never
arises here.
20.7. While recent amendments and regulatory measures are
welcome – and the Government merits commendation for

23 U.P. Avas Evam Vikas Parishad v. Friends Coop. Housing Society Ltd. (1995) Supp. 3 SCC 456,
Shantistar Builders v. Narayan Khimalal Totame (1990) 1 SCC 520, Anita Kushwaha v. Pushap Sudan
(2016) 8 SCC 509
206 [2025] 10 S.C.R.

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undertaking proactive structural reforms – much remains to be
done. It is imperative that RERA authorities are not reduced
to toothless tigers. They must be equipped with adequate
infrastructure, empowered tribunals, and effective enforcement
mechanisms so that their orders are implemented swiftly, in
letter and spirit. Only then can the constitutional promise of
the Right to Shelter under Article 21 be meaningfully realized
for homebuyers.

CONCLUSION
21. This Court reiterates that while investors are integral to any industry
and their interests warrant protection, speculative participants
driven purely by profit motives cannot be permitted to misuse the
Insolvency and Bankruptcy Code, which is a remedial framework
conceived for revival and the protection of sick companies and, in
the case of real estate, genuine homebuyers. Such investors have
alternative remedies under consumer law or RERA and even recourse
to Civil Courts in appropriate cases. To admit speculative claims
into insolvency proceedings would dilute the intelligible differentia
underlying the legislative scheme, destabilize the residential real
estate sector, and erode the social purpose embedded in housing
as a fundamental right.
21.1. The present case, therefore, provides an occasion to fortify
safeguards for bona fide homebuyers, who have invested
their life savings, to insulate the real estate market from
speculation and artificial inflation, and to secure speedy and
time-bound adjudication as mandated by the Code. As in the
culmination of the landmark Kesavananda Bharti case, where
“Kesavananda Bharati lost but the country won”, the larger
interest of the sector and genuine allottees must prevail over
narrower considerations.
21.2. In exercise of this Court’s jurisdiction, and to advance the
constitutional and statutory objectives, the following directions
are issued to the concerned authorities, in the larger interests
of bona fide homebuyers and the stability of the real estate
sector, which demand coordinated action by all stakeholders:
(1) Vacancies in NCLT / NCLAT shall be filled on a war
footing. Dedicated IBC benches with additional strength
[2025] 10 S.C.R. 207

Mansi Brar Fernandes v. Shubha Sharma and Anr.

should be constituted. Services of retired judges may
be utilized on ad hoc basis until regular appointments
are made. This Court is cognizant of the fact that similar
directions have been issued in the past, including in
Pioneer Urban case (supra), but no effective step has
been taken on the ground.
(2) The Union Government shall, within three months, file
a compliance report on measures taken to upgrade
NCLT/NCLAT infrastructure nationwide. The recent
closure of Chandigarh NCLT and portions of Delhi
NCLT due to water seepage in the Courtrooms and
Chambers of Members underscores the urgency of
robust infrastructural support.
(3) Within three months, a Committee chaired by a
retired High Court Judge shall be constituted, with
representatives from the Ministry of law, Ministry of
Housing, domain experts in Real Estate, Finance and
IBC from NIUA, HUDCO’s HSMI, IIMs, NLUs, and NITI
Aayog, as well as two eminent industry representatives.
The Committee shall suggest commercially viable
systemic reforms for cleansing and infusing credibility
into the real estate sector. NITI Aayog/ NIUA shall provide
research and secretarial support. The Committee shall
submit its report within six months of its constitution.
(4) States shall ensure that RERA authorities are adequately
staffed with infrastructure, experts, and resources. At
least one member of every RERA must be a legal expert
or consumer advocate with proven expertise in real
estate field. RERAs must conduct thorough diligence
before granting approval to any project. Failure to do
so, resulting in miscarriage of justice, shall amount
to an error unpardonable in law and may invite strict
intervention by this Court.
(5) Since real estate is the second largest sector in
IBC proceedings, IBBI24, in consultation with RERA

24 Insolvency and Bankruptcy Board of India
208 [2025] 10 S.C.R.

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authorities, shall constitute a council to frame specific
guidelines for insolvency proceedings in real estate,
including timelines for project-wise CIRP, and safeguards
for allottees.
(6) Resolution of real estate insolvency should, as a rule,
proceed on a project-specific basis rather than the
entire corporate debtor, unless circumstances justify
otherwise. This would protect solvent projects and
genuine homebuyers from collateral prejudice. IBBI
shall also devise a mechanism to enable handover of
possession to willing allottees where substantial units
in a project are complete.
(7) The Union Government shall consider establishing a
revival fund under NARCL25 or expanding the SWAMIH26
Fund, to provide bridge financing for stressed projects
undergoing CIRP, thereby preventing liquidation of
viable projects and safeguarding homebuyer interests.
SWAMIH Fund is a commendable initiative; however,
being a large fund involving public money, 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
CAG27 be carried out, with reports placed in the public
domain in a form comprehensible even to laypersons.
(8) Regulations shall ensure meaningful representation of
allottees in the CoC through authorized representatives,
with safeguards against conflicts of interest.
(9) At the admission stage of Section 7 petitions filed by
allottees, NCLTs must record a prima facie finding
on whether the applicant is a genuine homebuyer or
speculative investor. This would prevent unnecessary
admissions and reduce docket burden.
(10) The Government shall prioritize e-filing, video-
conferencing, and dedicated case management systems

25 National Asset Reconstruction Company Ltd.
26 Special Window for Affordable and Mid-Income Housing
27 Comptroller and Auditor General of India
[2025] 10 S.C.R. 209

Mansi Brar Fernandes v. Shubha Sharma and Anr.

for IBC matters, in view of the heavy caseload before
NCLTs.
(11) Every residential real estate transaction for new housing
projects shall be registered with local revenue authorities
upon payment of at least 20% of the property cost by
buyer/allottee. Further, to protect senior citizens and
bona fide homebuyers, contracts that significantly
deviate from the Model RERA Agreement to Sell, or
that incorporate returns / buyback clauses where the
allottee is over the age of 50, must be supported by
an affidavit sworn before the competent Revenue
Authority, certifying that the allottee understands the
attendant risks.
(12) In projects at nascent stages, such as where land is
yet to be acquired or construction has not commenced,
proceeds from allottees shall be placed in an escrow
account and disbursed in phases aligned with project
progress, as per a RERA-sanctioned SOP. Every RERA
shall devise such SOPs within six months from today.

Suggestions for future reform:
(1) IBBI may consider introducing “Basel-like” early warning
frameworks, drawing from comparative practices, such as,
pre-bankruptcy mediation and preventive restructuring, requiring
directors to initiate restructuring before defaults spiral out of
control.
(2) The Union Government should undertake a consultative
exercise to bring about uniformity in RERA Rules across States,
to remove ambiguity and fill lacunae in what is otherwise a
watershed legislation.
(3) Housing Boards, State-level Urban Development Authorities
(e.g., DDA, GMADA, MHADA, CHB) and CPSUs should
establish dedicated wings to revive and complete stalled projects
under IBC mechanisms. This would instill faith in the sector,
ensure affordable housing, and protect genuine homebuyers.
(4) It is a matter of grave concern that despite funding hundreds of
crores into various government-run think tanks and management
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institutions such as IIMs and IITs, India still requires a robust
homegrown consulting industry. Collaboration with Indian think
tanks and academic institutions should be strengthened to
build indigenous capacity for sectoral restructuring. This has
the potential to improve India’s ease of doing business and
accelerate economic growth.
(5) The Union Government may also consider establishing a body
corporate, on the lines of 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 IBC framework. Unsold inventory from such
projects could be utilized towards affordable housing schemes
like PMAY or for Government quarters, thereby addressing both
the housing shortage and revival of sick projects.
While this is a matter of policy falling within the exclusive domain of
the Government, it cannot remain a silent spectator. The Government
is constitutionally obliged to protect the interests of homebuyers and
the economy at large. It is not merely about houses or apartments;
the banking sector, allied industries, and employment for a large
populace are also at stake.
22. Before parting, we observe that 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. Through these directions,
this Court seeks to restore faith in the regulatory and insolvency
framework, deter speculative misuse, and ensure that the “dream
home” of India’s citizens does not turn into a lifelong nightmare.
23. Registry is directed to circulate a copy of this judgement to the
learned Cabinet Secretary to Government of India as well as to the
Chief Secretaries of all States, who shall take necessary steps at
the earliest.
24. To sum up:
(i) The findings of the NCLAT holding the appellants (Mansi Brar
Fernandes and Sunita Agarwal) to be speculative investors are
affirmed. Consequently, both the impugned orders setting aside
the admission of the Section 7 applications by the NCLT, also
[2025] 10 S.C.R. 211

Mansi Brar Fernandes v. Shubha Sharma and Anr.

stand affirmed. However, the appellants are at liberty to pursue
their remedies before the appropriate forum in accordance with
law, and in such event, the bar of limitation shall not apply.
(ii) Ordinance / Amendment Act is squarely applicable to the facts
of the present case and to that extent, the first impugned order
stands set aside.
25. With the aforesaid directions and suggestions, all the appeals stand
disposed of. There is no order as to costs.
26. Connected Miscellaneous Application(s), if any, stand disposed of.

Result of the case: Appeals disposed of.

†
Headnotes prepared by: Divya Pandey