The Supreme Court on Friday reaffirmed that the right to shelter is inseparable from the fundamental right to life under Article 21 of the Constitution, placing a binding duty on the State to ensure adequate housing

Issuing the ruling in a batch of appeals arising out of a National Company Law Appellate Tribunal (NCLAT) decision on a housing project in Greater Noida, a bench of Justices JB Pardiwala and R Mahadevan issued a comprehensive set of directions aimed at safeguarding homebuyers and reforming the real estate sector.

Stressing that a home is not just a physical structure but a symbol of dignity, stability, and aspiration, the court condemned speculative practices that have trapped thousands of families between unfinished projects, unending EMIs, and rising rents.

“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. The anxiety of not having a home despite paying a fortune is bound to take a serious toll on health, productivity, and dignity,” it said.

Noting that “housing is neither a luxury nor a speculative instrument, but a fundamental human need,” the bench issued a wide-ranging set of 12 binding directions, which included strengthening tribunals by filling up vacancies in NCLT and NCLAT “on a war footing,” with additional benches constituted to deal with real estate insolvencies. The Centre has been directed to file a compliance report within three months on upgrading tribunal infrastructure, after instances such as water seepage had forced closure of NCLT courtrooms in Delhi.

Within three months, the bench ordered, a committee chaired by a retired high court judge and comprising officials from the law and housing ministries, NITI Aayog, National Institute of Urban Affairs (NIUA), IIMs and industry representatives, will recommend systemic reforms for credibility and transparency in the sector.

The government has been further directed to consider expanding the SWAMIH (Special Window for Affordable and Mid-Income Housing) Fund or setting up a special revival fund under National Asset Reconstruction Company Ltd (NARCL) to provide last-mile financing for stalled projects, with CAG audits to ensure accountability.

States must equip RERA authorities with adequate staff, legal experts, and resources, and ensure that approvals are not given without thorough diligence, said the court, warning that lapses would be “unpardonable in law.”

According to the judgment, insolvency proceedings must be conducted project-wise, not across entire corporate entities, to protect solvent projects and genuine allottees. NCLTs must verify at the admission stage whether an applicant is a genuine homebuyer or a speculative investor.

Furthermore, the judgment mandated escrow accounts for funds in nascent projects, representation of allottees in committee of creditors (CoCs), and registration of transactions with revenue authorities once at least 20% payment is made. Contracts for senior citizens that deviate from the model RERA agreement will require sworn affidavits of risk awareness.