A New Era for Real Estate Insolvency: IBC (Amendment Act) 2026 and the IBBI Discussion Paper

INTRODUCTION

The Insolvency and Bankruptcy Code (Amendment) Act, 2026 (“Amendment Act”) received Presidential assent on April 6, 2026, and majority of the provisions were brought into force pursuant to the notification dated May 25, 2026. The Amendment Act marks a decisive and transformative milestone in the evolution of India’s insolvency regime, particularly in relation to the real estate sector. Although the Insolvency and Bankruptcy Code, 2016 (“Code”) had progressively evolved through judicial interpretation to address the unique complexities of real estate insolvency, the Amendment Act represents a conscious legislative effort to codify many of these judicially developed principles and to address long-standing structural challenges within the statutory framework.

The real estate sector has historically presented distinctive insolvency challenges owing to the multiplicity of stakeholders involved, particularly homebuyers, as well as frequent project delays, cost overruns and fragmented financing structures. Recognising these realities, the Amendment Act introduces a more flexible and project-sensitive resolution framework by facilitating asset-level and project-specific resolution strategies while promoting continuity of viable projects. The reforms are intended to maximise the prospects of project completion rather than liquidation, thereby preserving value for all stakeholders. More broadly, the introduction of creditor-initiated insolvency proceedings, a statutory framework for group insolvency, an enhanced role for the committee of creditors (“CoC”), and several other measures aimed at reducing procedural delays are expected to significantly strengthen India’s insolvency ecosystem.

This paper first examines the principal judicial decisions that laid the foundation for the evolution of real estate insolvency jurisprudence under the Code. It then analyses the key amendments introduced by the Amendment Act with a special focus on real estate insolvency, together with the proposals contained in the Insolvency and Bankruptcy Board of India’s (“IBBI”) Discussion Paper (as defined hereinbelow). The paper also briefly examines other significant legislative reforms that are likely to influence the broader insolvency framework and the adjudicatory process.

JUDICIAL FOUNDATION IN REAL ESTATE INSOLVENCY

The Code was originally conceived on the premise that a corporate debtor constitutes a single economic entity and, accordingly, adopted a ‘corporate debtor as a whole’ approach to insolvency resolution. While this framework was appropriate for conventional corporate insolvencies, its application to the real estate sector soon revealed significant practical limitations. Real estate developers typically undertake multiple independent projects, each having distinct land parcels, regulatory approvals, financing arrangements, construction timelines, and different allottees. Consequently, subjecting the entire corporate debtor to a single insolvency process merely because one project became financially distressed often jeopardised otherwise viable projects, disrupted cash flows, and prejudiced the interests of homebuyers whose projects remained commercially and operationally sound.

It was against this backdrop that the judiciary gradually developed a specialised body of jurisprudence tailored to the unique characteristics of real estate insolvency. Through a series of landmark decisions, the Supreme Court and the National Company Law Appellate Tribunal (“NCLAT”) departed from a rigid entity-centric approach and progressively evolved principles that prioritised project completion, protected homebuyers, and preserved economic value. These judicial innovations ultimately laid the foundation for several of the reforms that have now been expressly incorporated into the Amendment Act.

The first significant step towards recognising the unique position of homebuyers under the Code came in Chitra Sharma v. Union of India, wherein homebuyers challenged the proceedings on the ground that they were not recognized under the Code. Exercising its extraordinary jurisdiction under Article 142 of the Constitution, the Supreme Court directed that the CIRP be revived from its initial stage and that the CoC be reconstituted to include homebuyers. Following thereto, the Supreme Court in Pioneer Urban Land and Infrastructure Limited & Another v. Union of India & Others upheld the constitutional validity of the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018, which inserted the Explanation to Section 5(8)(f) of the Code, firmly recognizing homebuyers as financial creditors.

While these statutory and judicial developments secured representation for homebuyers within the CoC, they simultaneously exposed a structural limitation of the existing insolvency framework. Real estate insolvencies continued to be administered on an entity-wide basis notwithstanding the fact that different projects frequently possessed entirely different commercial characteristics. Consequently, applying a uniform insolvency process to all projects often undermined one of the fundamental objectives of the Code—namely value maximisation.

The statutory amendments granted the homebuyers a place in the CoC, however, the historic decision in Bikram Chatterji v. Union of India (Amrapali case) formed the roadmap for project-wise resolution. The Supreme Court conceptualized the principle of ‘homebuyer paramountcy’ whereunder the allottees’ rights to take possession of their apartments prevailed over those of secured banks and local development authorities. Rather than permitting liquidation or piecemeal enforcement against project assets, the Court removed the existing management, entrusted project completion to an independent agency, directed the creation of project-specific escrow mechanisms, and ensured that the remaining receivables from allottees would be utilised exclusively for completion of the respective projects. Although, the Court did not formally employ the terminology of “Reverse CIRP” or “Project-wise CIRP”, the principles articulated in Amrapali subsequently became the conceptual foundation for both doctrines.

The decision by the NCLAT in Flat Buyers Association v. Umang Realtech is widely regarded as the jurisprudential origin of two of the most significant concepts in real estate insolvency law. First, the CIRP of a real estate corporate debtor is limited in scope to that specific project on account of which the insolvency arose rather than extending automatically to all other projects undertaken by the same developer. Secondly, realizing conventional CIRP mechanisms were ill-suited to the realities of the real estate sector, the NCLAT introduced the novel idea of Reverse CIRP, whereby the promoter can intervene as an outside financier and not as a resolution applicant, infuse fresh funds as an external financier under the supervision of the resolution professional (“RP”), thereby facilitating completion of the project while safeguarding the interests of homebuyers.

This jurisprudence has since been carried forward, before the Supreme Court in Indiabulls Asset Reconstruction Company Limited v. Ram Kishore Arora (Supertech case) arising out of the insolvency proceedings concerning Supertech Limited (‘Supertech’). While deciding upon appeals, the Supreme Court did not disturb the direction of the Appellate Tribunal that CoC should be formed only in respect of the stressed Eco Village-II project of Supertech, while other projects of Supertech should continue under the administration of the RP along with the proper monitoring of their cashflows and promoter infusion. The Court found that forming a CoC for the entire company and putting all the projects under consolidated insolvency proceeding will result in irreversible harm to homebuyers in viable projects. Accordingly, the Supreme Court favoured the project-wise insolvency, while deliberately kept open the broader issue of viability of project-specific CIRP under the Code.

Collectively, these decisions transformed the jurisprudence governing real estate insolvency. They established that insolvency in the real estate sector cannot invariably be addressed through a uniform entity-level process and that project-specific considerations are often indispensable for preserving value and protecting homebuyers. These judicial developments progressively shifted the insolvency framework away from a rigid corporate debtor-centric model towards a more commercially realistic and project-oriented approach.

THE AMENDMENT ACT: KEY CHANGES IN THE REAL ESTATE SECTOR

A. Asset-level resolution – The expanded definition of resolution plan

The amended definition of ‘resolution plan’ under Section 5(26) of the Code expressly permits the sale of one or more assets of the corporate debtor through one or multiple resolution plans submitted by different resolution applicants, subject to prescribed conditions. This marks a shift towards a flexible, asset-level and project-specific resolution framework, particularly suited to the real estate sector. Real estate corporate debtors typically comprise of multiple projects at different stages of completion, each with distinct financials, stakeholders, and approvals. A single resolution plan often proves inefficient, as viable projects are weighed down by unviable ones. The Amendment Act addresses this by enabling segregation of assets and facilitating tailored resolution strategies, including project-wise transfer, completion, or monetisation.

The amendment also complements the regulatory framework under the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. In particular, Regulation 4D (inserted vide a notification dated February 15, 2024) mandates separate bank accounts for each real estate project, while the clarification to Regulation 36A(1) (also inserted vide a notification dated February 15, 2024) permits the RP, with committee of creditors’ approval, to invite separate resolution plans for individual or grouped projects.

B. Expanded duty to cooperate

The amendment to Section 19(1) of the Code extends the statutory obligation to assist/cooperate with the IRP/RP beyond the erstwhile promoters and individuals involved in the management of the corporate debtor to also include those engaged under a contract for service, such as architects, engineering consultants, contractors, project managers, and other service providers typically associated with real estate projects. This expansion is particularly vital in real estate insolvency, where the continuation and completion of projects depend on coordinated participation of multiple external stakeholders. For homebuyers, whose primary interest lies in project completion and possession of their flats or apartments, the Amendment Act enables the IRP/RP to maintain the corporate debtor as a going concern, ensure continuity of construction activities, preserve asset value, and effectively discharge statutory functions.

C. Continuity of statutory approvals

The Amendment Act has introduced sub-section (5) to Section 31 of the Code, with the objective of preserving the continuity of governmental and regulatory approvals post-approval of a resolution plan. Under this provision, where a resolution plan has been duly approved, any licence, permit, registration, quota, concession, clearance, or similar right granted by the Central Government, State Government, local authority, or sectoral regulator, and forming part of or linked to the resolution plan, shall not be suspended or terminated for the balance duration of such grant, provided that the successful resolution applicant or the corporate debtor continues to comply with the associated conditions.

This amendment is particularly significant for real estate insolvency, where projects are heavily dependent on multiple approvals such as RERA registration, building plan approval from local municipalities, fire safety NoC, NoC from local authorities for utility connections for the project like water, electricity and sewage networks etc. By legislatively preserving these approvals for the balance of their grant period, the Amendment Act reduces regulatory uncertainty, enhances the feasibility of resolution plans, and instils confidence in investors. It enables smoother project execution, safeguards homebuyer interests, and contributes to value maximization for creditors.

D. Codification of the clean-slate principle

Before the settling of this doctrine, resolution applications had to bear significant commercial risk. Following acquisition of the corporate debtor, the successful resolution applicant would be faced by ‘hydra-headed’ claims of various stakeholders. In order to address the said situation, the Supreme Court in Ghanashyam Mishra & Sons (P) Limited v. Edelweiss Asset Reconstruction Company Limited held that from the date of approval of the resolution plan, all claims which are not a part of such resolution plan shall stand extinguished and no action(s) can be taken in respect of such claims.

Codifying the above clean-slate theory, the insertion of sub-section (6) to Section 31 of the Code by the Amendment Act provides certainty to resolution applicants by stipulating that, upon approval of a plan, all pre-approval claims against the corporate debtor and its assets stand extinguished and no fresh or continuing proceedings can be pursued in relation to such claims. Given that real estate insolvencies frequently involve instances of fraud, diversion of funds, or project mismanagement by erstwhile promoter, the seclusion of the corporate debtor’s assets from enforcement actions by authorities such as the ED or the SFIO becomes a key enabler for successful resolution. The Amendment Act enhances investor confidence and is likely to encourage more robust participation from resolution applicants in stressed real estate projects. However, the legislature and tribunals/courts will need to ensure that this provision does not inadvertently extinguish the legitimate claims of homebuyers in respect of fraudulent conduct, particularly where such claims have been crystallised through orders of investigating authorities.

E. Creditor-Initiated Insolvency Resolution Process

Perhaps the most jurisprudentially significant reform introduced by the Amendment Act, at least in the context of real estate insolvency, is the formal introduction of the Creditor-Initiated Insolvency Resolution Process (“CIIRP”) in Chapter IV-A of the Code. A defining feature of this mechanism, as set out under Section 58F of the Code, is that during the subsistence of the creditor-initiated process, the management and control of the corporate debtor remain vested in its existing Board of Directors or partners, rather than being displaced by an interim resolution professional (“IRP”) or a RP.

This framework bears a close resemblance to the concept of reverse CIRP, which had evolved through judicial pronouncements, particularly in the context of real estate insolvency. Under Reverse CIRP, the promoter of the project, despite the initiation of CIRP, effectively steps in as a financial contributor from an external capacity, infusing funds to ensure completion of the project for the benefit of stakeholders, especially homebuyers. In such scenarios, the restrictions imposed under Section 29A of the Code have not been applied in a rigid manner against erstwhile promoters. By formally introducing the CIIRP framework, the legislature appears to have recognized the principles underlying Reverse CIRP, thereby providing statutory backing to a practice that had previously developed through judicial innovation.

F. The group insolvency framework

In the past, the insolvency framework functioned within the rigid framework of "one company, one insolvency," which meant that each corporate entity was taken in isolation. However, in the corporate sector, businesses often function through an elaborate network of special purpose vehicles (“SPVs”) or subsidiaries. When one came across a group of distressed entities, it gave rise to a very messy process wherein insolvency cases were being handled in various tribunals.

Prior to codification of the framework, the group insolvency framework was recognized for the first time in State Bank of India v. Videocon Industries Limited, wherein the NCLT Mumbai decided on the total consolidation of assets and liabilities of 13 companies of the Videocon Group while formulating certain guidelines for consolidation to take place.

By way of the newly introduced Chapter V-A under the Code, which establishes a voluntary group insolvency framework for interconnected corporate entities, the group insolvency framework now stands codified. This development initially raised concerns regarding its potential applicability to real estate companies, particularly those operating through project-specific entities or SPVs. However, the group insolvency framework is designed as a voluntary mechanism focused on procedural coordination rather than substantive consolidation.

It explicitly rejects the pooling or merging of assets and liabilities across separate corporate entities, preserving the legal distinctiveness of each SPVs under RERA. The Amendment Act expressly safeguards the principle of entity separateness, permitting coordinated proceedings only where such coordination is value accretive. The CoC retains full commercial discretion to opt into or out of these coordinated proceedings. For homebuyers, this procedural ring-fencing ensures that the capital and assets of a financially sound SPV cannot be diluted or diverted to bail out insolvent sister projects within the broader corporate group.

OTHER MAJOR AMENDMENTS

A. Strict admission timelines

The Amendment Act has substituted sub-section (5) to Section 7 of the Code as a result of which the NCLT is now mandatorily required pass an order within 14 (fourteen) days of receiving an application for admission of CIRP and admit it if: (i) application is complete; (ii) default has been established; and (iii) there are no disciplinary proceedings pending against the proposed IRP. No other grounds can be taken into consideration by the NCLT in admitting/rejecting an application. Further, if the order is not passed within the timeline, reasons must be recorded in writing.

B. Restricted withdrawal of CIRP

In the past, when an application for insolvency was admitted, the suspended board of the corporate debtor tried to settle the outstanding dues with the financial creditor without considering the dues of other creditors of corporate debtor. This was then taken cognizance of by the Supreme Court in GLAS Trust Company LLC v. BYJU Raveendran wherein, while setting aside the decision of the NCLAT, the Apex Court held that the procedure laid down under the Code must be strictly followed and tribunals cannot use inherent powers to subvert the established statutory process of Section 12A of the Code.

Codifying the above, the Amendment Act has substituted Section 12A of the Code which deals with withdrawal of application admitted under section 7, 9 or 10. Under the revised framework, withdrawal of CIRP is permitted with the approval of 90% (ninety percent) of the CoC, only after the CoC has been formed but before the first invitation for submission of a resolution plan, thereby substantially narrowing the window in which the CIRP can be withdrawn.

C. Re-initiation of CIRP

The Amendment Act introduces sub-section (1A) to Section 33 of the Code whereby if a CIRP lapses without yielding any resolution plan, or if a submitted plan is ultimately rejected, the process can now be reinstated once by an application made by the CoC with a 66% (sixty-six percent) majority. This statutory revival is subject to a hard cap of 120 (one hundred and twenty) days to complete the entire process, and in case of failure, the NCLT must mandatorily pass a liquidation order.

D. Payment to dissenting financial creditors under a resolution plan

Earlier, under Section 30(2)(b) of the Code, dissenting financial creditors, especially those having a security interest in critical assets, were entitled to an amount equal to their liquidation value under Section 53 of the Code. This resulted in a negative incentive where lenders would actually vote against a successful corporate plan just because they would earn more from such a decision by virtue of their security interest. There had been a conflicting view as to whether a dissenting secured financial creditor’s minimum payout under the Code should be calculated based on their overall proportional voting share (India Resurgence ARC (P) Limited v. Amit Metaliks Limited) or the actual liquidation value of their specific security interest (DBS Bank Limited v. Ruchi Soya Industries Limited), which was then referred to a larger bench.

Settling the dust around this point, by way of introduction of clause (ba) in sub-section (2) to Section 30 of the Code, a dissenting financial creditor’s payout is now capped at the lower of amount that would have been paid to them: (i) in the event of liquidation under Section 53 of the Code; or (ii) if the amount to be distributed under the resolution plan was distributed as per the order of priority under Section 53(1) of the Code. Thus, the Amendment Act addresses the situation where dissenting financial creditors who held exclusive security interest over the assets of the corporate debtor were incentivised to dissent in order to get a higher value under the resolution plan.

E. Separation of distribution under a resolution plan from its implementation

To prevent inter-creditor asset disputes from stalling approval of a resolution plan, by way of introduction of second proviso to sub-section (1) to Section 31(1) of the Code, the NCLT now is at liberty to first approve the implementation of a resolution plan so that the successful resolution applicant can take over the corporate debtor to avoid value deterioration and thereafter, the contentious issue of distribution of proceeds among creditors can be adjudicated within a period of 30 (thirty) days from the date of approval of implementation of such resolution plan.

F. Narrowing the scope of ‘security interest’

By way of introduction of an explanation to Clause 3(31) of the Code, the Amendment Act clarifies that the definition of ‘security interest’ under Section 3(31) of the Code strictly covers security interest created by a contract or mutual arrangement between parties and shall not include a security interest created merely by operation of law. Hence, statutory charges, tax liens, and government dues are now explicitly excluded from the definition of a ‘security interest’.

G. Avoidance transactions and fraudulent/wrongful trading

To prevent promoters from intentionally delaying court admissions to age out their misdeeds, by way of amendment to Sections 43, 46, and 50 of the Code, the statutory look-back period cases of avoidance transactions and fraudulent/wrongful trading is now calculated backward from the initial date of filing the insolvency application, rather than the insolvency commencement date. Also, by way of insertion of proviso to Clause 5(11) of the Code, it has been clarified that where multiple applications for initiation of CIRP is pending, the initiation date shall be the date on which the first such application was made.

Furthermore, by way of substitution of Section 47 of the Code, the Amendment Act empowers creditors to directly file an application before the NCLT if preferential or undervalued transactions are discovered.

H. Creditor-Initiated Insolvency Resolution Process

The CIIRP introduced by the Amendment Act, by way of introduction of Chapter IV-A to the Code, represents a significant evolution in India’s insolvency framework by shifting towards a creditor-driven and largely out-of-court resolution mechanism. CIIRP allows a financial creditor, belonging to such class of financial institutions as may be notified by the Central Government, to initiate the process upon securing approval from the financial creditors of the applicable notified class representing not less than fifty-one per cent in value of the debt due, after giving a mandatory prior notice period to the corporate debtor to cure the default.

Unlike the traditional CIRP, the present process is designed to function with minimal judicial intervention, thereby reducing delays and the burden on adjudicating authorities. A key distinguishing feature is the debtor-in-possession model, where the existing management continues to operate the business under the supervision of a RP and oversight of creditors. The process is time-bound, typically envisaged to be completed within 150 days with a limited extension, and includes flexibility to transition into CIRP if creditors deem it necessary.

I. Cross-Border Insolvency

By way of insertion of Section 240C to the Code, the Amendment Act empowers the Central Government to make rules for cross-border insolvency, allowing the government to coordinate insolvency proceedings for debtors with assets or legal claims across multiple global jurisdictions.

IBBI Discussion Paper dated June 30, 2026 titled “Strengthening resolution outcomes in real estate insolvency” (“Discussion Paper”)

Post the aforementioned amendments, especially with regard to real estate insolvency, being introduced into the Code vide the Amendment Act, the IBBI further published on its website the titular Discussion Paper in an attempt to further streamline the ongoing discourse regarding real estate insolvencies with help from various stakeholders. While the authors of this paper initially thought that they would restrict the same to only the relevant amendments brought about by the Amendment Act, the timing of such publication of the Discussion Paper by the IBBI, in our opinion, makes it extremely relevant to include the instant portion on an analysis of the said IBBI Discussion Paper. Indeed, without at least touching upon the same, a discussion today on the changing real estate insolvency regime in India would be incomplete in our view.

The IBBI Discussion Paper addresses specific challenges arising from the manner in which real estate companies, typically engaged in multiple projects at different stages of completion, are presently admitted into CIRP as a single corporate entity. This entity-level admission results in all projects – including completed, substantially completed or occupied projects – being drawn into CIRP, even where there is no insolvency-resolution necessity for such projects, thereby disrupting ongoing operations and affecting homebuyers. The IBBI Discussion Paper highlights systemic issues such as inadequate project-wise ring-fencing and disclosures, information asymmetry for resolution applicants, practical hurdles faced by homebuyers (as financial creditors in a class), and operational difficulties encountered by RPs in accessing reliable project-level information and coordinating with Real Estate Regulatory Authorities (“RERA”).

In order to address the aforesaid loopholes and in view of the directions passed by the Supreme Court in Mansi Brar Fernandes v. Shubha Sharma & Others and the recommendations received from the expert Committee constituted by IBBI on Framing Guidelines for Insolvency Proceedings in the Real Estate Sector, IBBI has released this Discussion Paper on June 30, 2026 proposing extensive amendments to the CIRP Regulations, 2016.

A summary of the key proposals along with the problems and the solutions proposed by the IBBI are as under:

1. Identification and exclusion of real estate projects from CIRP

Statement of Problem

The present CIRP regime does not provide a structured mechanism for identification of real estate projects and determination of whether any project of the corporate debtor, which have been completed or occupied or are operationally independent, may remain outside the scope of CIRP.

Solution proposed by IBBI

It is proposed to insert Regulation 18B to the CIRP Regulations for identification and exclusion of real estate projects. The CoC in the first meeting, will be required to undertake a project-wise assessment of all real estate projects of the corporate debtor, based on the information provided by the resolution professional such as RERA registration particulars, stage of completion, occupancy and possession status.

The CoC, thereafter, may identify any real estate project which in its opinion does not require resolution under the CIRP and, accordingly by a vote of not less than 66 percent voting share, authorise the resolution professional to apply to the adjudicating authority to exclude identified projects which, in the opinion of CoC, do not require resolution under CIRP.

2. Strengthening project-wise ring-fencing of funds and accounts

Statement of Problem

Despite the requirement for a separate bank account for each real estate project under Regulation 4D of the CIRP Regulations, the absence of a comprehensive framework for project-wise accounting and fund utilization during CIRP makes it difficult to track cash flows, receivables, and expenditures, ultimately undermining confidence of homebuyers and other stakeholders.

Solution proposed by IBBI

It is proposed to insert Regulation 4DA to the CIRP Regulations whereunder the RP will be required to maintain separate project-wise books of accounts, route all payments and receipts through project specific bank account, provide periodic financial disclosures relating to each real estate project to the CoC, and strictly comply with the fund utilization requirements under the RERA.

3. Handing over possession of units to allottees

Statement of Problem

Although Regulation 4E of the CIRP Regulations allows the RP to hand over possession of real estate units to allottees with a 66% (sixty-six percent) CoC vote, requiring this prior approval, especially for units already complete or substantially complete at the start of CIRP, causes unnecessary delays in delivering units to eligible allottees who have fulfilled their contractual obligations.

Solution proposed by IBBI

The proposed framework has recommended two alternatives:

i. Insertion of a proviso to Regulation 4E of the CIRP Regulations – The Resolution Professional to hand over possession and facilitate registration for units that are complete on the insolvency commencement date, after verifying that the allottee has fulfilled their contractual obligations, without the requirement of prior CoC approval.

ii. Insertion of an Explanation to Regulation 4E of the CIRP Regulations – Permit the CoC to grant a one-time, in-principle approval under Regulation 4E authorising the RP to process all possession requests during CIRP, without seeking separate approvals each time.

4. Simplified claim Form for real estate allottees

Statement of Problem

The current Form CA which serves as a common claim submission mechanism for creditors in a class fails to accommodate the unique needs of real estate allottees who are mostly individual consumers seeking possession, conveyance, or refunds rather than traditional financial creditors, making it difficult for homebuyers to understand and complete the existing Form CA.

Solution proposed by IBBI

It is proposed to introduce a simplified, allottee-specific claim form namely Form CA-R (will be issued through a circular), capturing: (i) allottee particulars; (ii) project and unit details; (iii) financial details; (iv) preference of relief (possession / registration / refund / other); (v) possession status; and (vi) supporting documents.

5. Identification and disclosure of allottee preferences in real estate CIRP

Statement of Problem

Real estate CIRPs involve diverse homebuyer expectations: some seek completion and possession, others seek registration or refund. The current framework does not require disclosure of the nature of relief sought by individual allottees, resulting in limited visibility for resolution applicants, CoC and AA when evaluating plans.

Solution proposed by IBBI

To address this gap in the Information Memorandum while preserving the status of homebuyers as a single homogeneous class in the CoC, it is proposed to insert Regulation 36(2)(jb) to the CIRP Regulations mandating disclosure of project-wise details of allottees, including those seeking possession, refund, conveyance/registration/transfer of title, any other relief, and those who have not indicated any preference.

6. Mandatory disclosures in the Information Memorandum of real estate CIRP

Statement of Problem

Real estate CIRP suffers from a severe lack of uniformity and consistency in the disclosures provided in the Information Memorandum and resolution plans. Critical project-specific details like completed and incomplete units, sold and unsold inventory, construction status are presented in widely varying formats and inconsistent levels of detail.

Solution proposed by IBBI

It is proposed to strengthen the disclosure framework by insertion of Regulation 36(2)(hb) to the CIRP Regulations by mandating additional project-wise disclosures in the Information Memorandum which would provide stakeholders with a comprehensive picture of the status of the project and facilitate informed decision-making by prospective resolution applicants, creditors and homebuyers.

7. Independent technical and cost-to-complete assessment for real estate projects

Statement of Problem

It has been observed that real estate resolution plans are fundamentally dependent upon accurate estimation of the cost and timeline required for project completion and in its absence, there may be difficulty in evaluating the feasibility of competing resolution proposals.

Solution proposed by IBBI

It is proposed to insert Regulation 4F to the CIRP Regulations, whereunder the Resolution Professional will be required to appoint professionals to undertake a project wise technical and cost to complete assessment of real estate projects.

8. Mandatory contents of resolution plans in real estate CIRP

Statement of Problem

Resolution plans frequently lack clarity regarding the treatment of allottees, precise timelines for project completion, implementation milestones, monitoring mechanisms, and the exact conditions under which the obligations are legally considered discharged. Hence, stakeholders are left with vague standards frequently triggering post-approval disputes.

Solution proposed by IBBI

It is proposed to substitute Regulation 38A of the CIRP Regulations recommending mandatory contents of resolution plan for real estate projects. The resolution plan should incorporate project-wise details of total units (sanctioned, constructed, under construction; sold/unsold), treatment of allottees (possession, conveyance/registration/transfer, refund or other relief including those who have not filed claims), timelines for completion and delivery (project / phase / tower-wise), consequences of default by allottees (including failure to pay revised or balance consideration) and periodic reporting to the monitoring committee.

9. Enhancing composition of monitoring committee in real estate cases

Statement of Problem

Real estate plans typically require long-term implementation, involving construction, approvals, possession and documentation. Although current frameworks require a monitoring committee to oversee approved plans, they lack structured participation from homebuyers and concerned development authorities. Without an inclusive stakeholder representation, critical construction milestones, approval bottlenecks, and allottee concerns go unaddressed, ultimately triggering severe delays, operational disputes, and excessive post-approval litigation.

Solution proposed by IBBI

In order to enhance composition of monitoring committee, it is proposed to add a proviso to Regulation 38(4)(b) to the CIRP Regulations, wherein it is recommended that every monitoring committee for a real estate resolution plan must explicitly incorporate the authorised representative of the allottees, alongside nominated representatives from the concerned Real Estate Regulatory Authority and relevant land development authority, provided they choose to participate.

10. Enhancing transparency in functioning of Authorised Representatives

Statement of Problem

In cases involving large classes of creditors such as homebuyers, the AR is the sole interface between such class and the CoC. Currently, there is no mandated recording of substance of AR–creditor discussions, and creditors choose ARs at the public announcement stage with limited information about the AR’s role or profile, reducing transparency and informed participation.

Solution proposed by IBBI

The following have been proposed:

i. Amend Regulation 6(2)(bb) of the CIRP Regulations so that public announcements provide a hyperlink of the brief profile of the proposed ARs (including experience and registration details) and a hyperlink setting out the role and duties of ARs under the Code and CIRP Regulations.

ii. Insert Regulation 16B to the CIRP Regulations requiring ARs to submit minutes of meetings held with creditors in the class to the RP, to be placed before the CoC; and

iii. Insert Regulation 24(6A) to the CIRP Regulations requiring CoC minutes to record views, concerns and opinions expressed by the AR on behalf of such creditors.

11. Additional safeguards prior to liquidation of real estate projects

Statement of Problem

Real estate insolvency proceedings differ fundamentally from standard corporate liquidations because their primary objective is project completion and possession delivery rather than asset liquidation. Liquidating a partially built real estate project destroys immense economic value, causes protracted completion delays, and shatters the legitimate expectations of homebuyers who have invested hard-earned savings into residential units. Currently, without explicit procedural safeguards ensuring project completion is thoroughly exhausted, real estate proceedings risk premature liquidations that severely harm stakeholder interests.

Solution proposed by IBBI

To institutionalize liquidation as an absolute measure of last resort, it is proposed to introduce rigorous procedural safeguard before any liquidation proposal can be considered by the CoC by inserting Regulation 39D of the CIRP Regulations. The RP must present a detailed note outlining all past efforts made to secure completion-oriented solutions alongside clear justifications for why these options proved unfeasible.

CoC minutes must record that alternatives to liquidation were considered and reasons for concluding liquidation is most feasible; when filing for liquidation, the RP must annex the note and relevant extracts of CoC deliberations.

12. Strengthening coordination between resolution professionals and real estate regulatory authorities

Statement of Problem

RPs face severe difficulties in obtaining reliable, standardized project-level data typically held with RERA rather than the Corporate Debtor. Additionally, persistent uncertainty regarding whether an insolvent company remains bound by RERA regulations creates compliance gaps, delayed filings, and operational disputes, ultimately stalling claim verification and the preparation of the Information Memorandum.

Solution proposed by IBBI

It is proposed to issue a circular:

i. To encourage IRP/RPs to seek specified information from concerned RERA (project registration, sanctioned plans, registration status, allottee records, escrow account status, approvals and compliances) and rely on such records, subject to verification, especially where CD records are incomplete;

ii. To direct RPs to ensure continued compliance with RERA during CIRP; and

iii. RPs may invite RERA to furnish written views on regulatory feasibility and implementation aspects of resolution plans, to be placed before CoC and prospective applicants.

13. Prominent disclosure of corporate insolvency resolution process at project and office sites

Statement of Problem

Public announcements published in newspapers or websites frequently fail to reach dispersed stakeholders, leaving them completely unaware that the Corporate Debtor has entered CIRP. This lack of awareness causes delayed claim filings, continued inadvertent dealings with former management, widespread confusion over project status, and contentious disputes throughout the insolvency lifecycle. Because project sites and corporate offices serve as the primary physical touchpoints for stakeholders, the absence of direct notifications at these locations creates a critical communication gap.

Solution proposed by IBBI

It is proposed to mandate disclosures regarding the commencement of CIRP across all project sites and offices of the Corporate Debtor. The IRP or RP must install conspicuous signboards at active project sites as well as notice boards at the registered office, corporate office, site offices, sales offices, and any other stakeholder-accessible locations. These notices must explicitly state that the Corporate Debtor is undergoing CIRP and provide the official name and direct contact details of the insolvency professional managing its affairs, facilitating direct communication and timely claim submissions.

PARTING THOUGHTS

The Insolvency and Bankruptcy Code (Amendment) Act, 2026 marks a significant milestone in the evolution of India’s insolvency framework. More than a series of legislative amendments, it represents a conscious effort to align the Code with the practical realities of modern insolvency, particularly in the real estate sector. By incorporating principles that had gradually evolved through judicial interpretation, the Amendment Act strengthens the statutory framework while reaffirming the Code’s overarching objective of facilitating timely, value-maximizing resolution.

The reforms are particularly significant for real estate insolvency, where conventional entity-wide resolution often proved inadequate. Through measures such as asset-level resolution, continuity of statutory approvals, codification of the clean-slate principle, and creditor-initiated insolvency resolution, the Amendment Act introduces greater commercial flexibility and places increased emphasis on project completion and stakeholder protection.

The IBBI’s Discussion Paper further demonstrates that the reform process remains dynamic. Its proposals seek to strengthen project-specific resolution, enhance transparency, improve governance, and better protect homebuyers, signaling a continued shift towards a more specialized and commercially responsive insolvency framework.

Ultimately, the success of these reforms will depend upon their effective implementation by the Adjudicating Authorities, insolvency professionals, committees of creditors, and other stakeholders. While judicial interpretation will inevitably shape the scope of several newly introduced provisions, the legislative direction is clear. The insolvency framework is steadily evolving towards a more pragmatic, project-oriented, and stakeholder-centric model that prioritizes value preservation over liquidation. If implemented effectively, these reforms have the potential to strengthen confidence in India’s insolvency regime and further the Code’s objective of delivering efficient and commercially viable resolution outcomes.