1. Homebuyers filed Section 7 IBC applications — NCLAT set aside admissions, classifying applicants as speculative investors due to buy-back agreements and assured returns. (Para 4 , 6 , 8 )
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2025 Supreme(SC) 1681
SUPREME COURT OF INDIA
J.B. PARDIWALA, R. MAHADEVAN, JJ.
Mansi Brar Fernandes – Appellant
Versus
Shubha Sharma And Anr. – Respondents
Civil Appeal No. 3826 of 2020
With
Shubha Sharma – Appellant
Versus
Mansi Brar Fernandes And Anr. – Respondents
Civil Appeal No. 540 of 2021
With
Ashlesh Gupta And Anr. – Appellants
Versus
Mansi Brar Fernandes And Anr. – Respondents
Civil Appeal No. 5495 of 2025
With
Sunita Agarwal – Appellant
Versus
Ankit Goyat And Anr. – Respondents
Civil Appeal No. 3903 of 2022
Decided On : 12-09-2025
Advocates appeared:
For the Appellant(s) : Mr. Chandra Shekhar Yadav, Adv. Mr. Awanish Sinha, AOR Mr. Vineet Kumar, Adv. Ms. Harshita Gulati, Adv. Ms. Anindita Mitra, AOR Mr. Akhil Anand, AOR Mr. Saurabh Mishra, Sr. Adv. Ms. Nupur Kumar, AOR Ms. Diksha Dadu, Adv.
For the Respondent(s): Ms. Nupur Kumar, AOR Mr. Kaustubh Shukla, AOR Ms. Pushpanjali Singh, Adv. Mr. Praveen Kumar Singh, Adv. Ms. Harshita Gulati, Adv. Mr. Vineet Kumar, Adv. Mr. Vishal Sinha, Adv. Ms. Anindita Mitra, AOR Ms. Mantika Haryani, Adv. Ms. Astha Sharma, AOR Mr. Bhanu Mishra, Adv.
For the Appellant(s) : Mr. Chandra Shekhar Yadav, Adv. Mr. Awanish Sinha, AOR Mr. Vineet Kumar, Adv. Ms. Harshita Gulati, Adv. Ms. Anindita Mitra, AOR Mr. Akhil Anand, AOR Mr. Saurabh Mishra, Sr. Adv. Ms. Nupur Kumar, AOR Ms. Diksha Dadu, Adv.
For the Respondent(s): Ms. Nupur Kumar, AOR Mr. Kaustubh Shukla, AOR Ms. Pushpanjali Singh, Adv. Mr. Praveen Kumar Singh, Adv. Ms. Harshita Gulati, Adv. Mr. Vineet Kumar, Adv. Mr. Vishal Sinha, Adv. Ms. Anindita Mitra, AOR Ms. Mantika Haryani, Adv. Ms. Astha Sharma, AOR Mr. Bhanu Mishra, Adv.
The court affirmed the distinction between speculative investors and genuine homebuyers under the IBC, emphasizing that the Insolvency framework is meant for genuine claims and not for speculative profit motives.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 7 - Appeal against NCLAT decision - Court held that appellants were speculative investors, not genuine homebuyers - NCLAT's finding that statutory requirements post-Amendment Ordinance applicable was erroneous - Homebuyers' rights protected under Article 21 must be prioritized to deter misuse of the Code. (Paras 18.1, 18.6, 21.1)
(B) Amendments to IBC - Intent to protect genuine homebuyers against speculative investors underscored - Statutory threshold requirements for allottees to be collectively adhered to. (Paras 18.4.5, 19.5)
(C) Legal Interpretation of 'speculative trading' in residential real estate contracts made clear. (Paras 18.2, 18.3)
Legal Category Hierarchy
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insolvency and bankruptcy law
-
corporate insolvency resolution process
-
financial creditors
- allottees / homebuyers
- speculative investors
- section 7 applications (Para 19)
-
financial creditors
-
corporate insolvency resolution process
-
constitutional law
-
fundamental rights
- right to shelter / article 21 (Para 20)
-
fundamental rights
-
practice and procedure
-
judicial doctrines
- actus curiae neminem gravabit
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judicial doctrines
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real estate law
-
regulatory frameworks
- rera
-
regulatory frameworks
Table of Contents
2. Whether applicants are genuine homebuyers or speculative investors — whether the statutory threshold for allottees under the IBC Amendment Ordinance applies to pending applications. (Para 9 , 11 , 12 , 13 )
3. Speculative investors seeking profit without intent for possession cannot trigger CIRP — judicial acts should not prejudice litigants regarding legislative changes during reserved orders. (Para 15 , 18 , 19 )
4. NCLAT findings on speculative investors affirmed — Section 7 applications set aside — Ordinance applicability affirmed — extensive directions issued for real estate sector and IBC reforms. (Para 24 )
5. Can speculative investors initiate the Corporate Insolvency Resolution Process (CIRP) under Section 7 of the IBC?
No. Speculative investors cannot be permitted to misuse the IBC as a debt recovery mechanism to trigger CIRP, as this would destabilize projects and prejudice genuine homebuyers. (Para 21 )
6. What is the effect of the IBC Amendment Ordinance threshold requirement on applications pending admission?
Applications must be modified to comply with the threshold—requiring at least 100 allottees or 10% of total allottees—within thirty days of the Act's commencement, otherwise they are deemed withdrawn before admission. (Para 19 )
7. What is the legal status of the right to shelter in India?
The right to shelter is an integral part of the right to life under Article 21 of the Constitution, imposing a constitutional obligation on the State to protect homebuyers from fraud and exploitation. (Para 20 )
JUDGMENT :
R. Mahadevan, J.
1. There are four appeals, which, having been heard together, are being disposed of by this common judgment.
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[For short, “the first impugned order”] passed by the National Company Law Appellate Tribunal, New Delhi2[For short, “the NCLAT”], 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[For short, “the second impugned order”] 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[For short, “the IBC”] 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 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 India , (2019) 4 SCC 17 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
