NCLT: A Licence to Scam for Builders? How India’s Insolvency System Can Turn a Homebuyer’s Nightmare into a Corporate Reset

The house was promised. The money was collected. The insolvency proceedings began. Where is the home?

For thousands of Indian homebuyers, purchasing a home is not an ordinary commercial transaction. It is a decades-long financial commitment involving savings, retirement funds, family contributions, bank loans and monthly EMIs. A builder promises a possession date. The buyer pays according to a schedule. The bank continues collecting its instalments. And the family waits.

Then the project stalls.

The developer blames financial difficulties, delayed approvals, creditors, market conditions or litigation. Eventually, the matter reaches the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016 (IBC).

The proceedings are presented as a solution. The company will be rescued, a resolution applicant will take over, fresh capital will enter, construction will resume and the project will finally reach completion.

But what happens when the insolvency process itself stretches across years? What happens when an approved resolution plan does not translate into timely possession? What happens to buyers whose claims are disputed, omitted, submitted late or left unresolved? And what happens when serious questions about the movement of homebuyers’ money remain even as the corporate insolvency process proceeds?

These are not academic questions. They go to the heart of whether India’s insolvency regime is delivering justice to the people whose money helped finance the very projects now being rescued.

The provocative accusation that the NCLT has become a “licence to scam for builders” is not an established legal finding against the tribunal. It is, however, a legitimate subject for critical examination when the outcomes of insolvency proceedings are measured against the promises made to homebuyers.

The question is not whether every distressed builder is dishonest. That would be an indefensible generalisation. Nor is every insolvency a scam. Financial distress can be genuine, and insolvency proceedings can preserve businesses, projects and employment.

The sharper question is this: has the system developed sufficiently strong safeguards to ensure that a corporate rescue does not become a procedural escape route from the practical consequences of failing homebuyers?

The record of litigation, regulatory warnings and reform proposals demands an answer.

1. The IBC was designed to resolve insolvency—not to make delayed possession a way of life

The IBC was introduced to address corporate insolvency through a structured process intended to preserve viable businesses and maximise the value of their assets. It was never designed as a general-purpose mechanism for settling every individual consumer complaint.

Homebuyers occupy a distinctive position in this framework. Their money is received in anticipation of a future home, but it also functions as an important source of finance for real estate development.

Recognising this economic reality, Parliament amended the IBC to treat real estate allottees as financial creditors. In its 2019 judgment in Pioneer Urban Land and Infrastructure Ltd. v. Union of India, the Supreme Court upheld that legislative approach.

The amendment gave eligible homebuyers a route to initiate corporate insolvency proceedings and a recognised position in the insolvency process.

That was an important safeguard. But recognition as a financial creditor is not the same thing as a guarantee of possession, repayment or individual enforcement of contractual rights.

The distinction is crucial.

The insolvency process is concerned with the corporate debtor and the collective interests of creditors. The homebuyer, meanwhile, is often concerned with something far more immediate: a completed apartment, a clear title, basic amenities and an end to paying rent alongside a home loan.

These priorities can overlap. They can also collide.

A resolution applicant may propose a plan to revive the company and distribute value among stakeholders. Yet a buyer who has already paid a substantial portion—or even the entire price—may still be left asking when the promised home will actually be delivered.

A resolution plan may therefore represent progress for the corporate debtor without providing an equally satisfactory outcome for every allottee.

That is the uncomfortable limitation at the centre of real estate insolvency: a company can move forward through a resolution process while the family that financed its project remains trapped in uncertainty.

2. A regulatory warning that cannot be brushed aside: IBC misuse is now an acknowledged concern

On 9 September 2026, the Insolvency and Bankruptcy Board of India (IBBI) issued Circular No. IBBI/CIRP/105/2026 on due diligence by insolvency professionals regarding the misuse of the IBC framework.

The circular stated that the regulator had received information from law-enforcement and regulatory agencies about cases in which the insolvency framework was allegedly being used for purposes other than resolving insolvency or liquidating a corporate debtor.

The illustrative concerns included attempts to mitigate tax liabilities, avoid regulatory scrutiny, mitigate investigations, prosecutions or penalties, and monetise or ring-fence assets.

The circular also identified warning signs that may warrant closer examination, including:

• Connected companies entering insolvency within a proximate period, with common promoters, directors, addresses or inter-lending relationships.
• Limited competition in a resolution process or the repeated appearance of the same resolution applicant across connected companies.
• Creditor realisations grossly disproportionate to admitted claims without adequate valuation support.
• Links between a corporate debtor or its group and regulatory or enforcement proceedings concerning fraud.
• Substantial loans, advances or investments involving related entities despite an absence of operations or an inadequate basis for writing off amounts.

This is significant because it demonstrates that the possibility of abusing insolvency proceedings is not merely a concern raised by frustrated consumers or critical journalists. The insolvency regulator itself has instructed professionals to be alert to such risks.

However, the circular must be read carefully. It does not declare that every insolvency proceeding is fraudulent, nor does it establish that the real estate sector as a whole is abusing the law. It expressly states that the indicators are illustrative and that none, by itself, proves misuse.

Where an insolvency professional forms a reasonable view, after appropriate examination, that a process may be serving a fraudulent or malicious purpose other than genuine resolution or liquidation, the circular directs the professional to approach the adjudicating authority with the relevant material and seek appropriate directions.

That makes the central accountability question even more pressing.

If professionals have access to company books, related-party transactions, creditor information and the resolution process, what safeguards ensure that warning signs are investigated thoroughly, reported promptly and addressed before assets or project value are lost?

The existence of a circular is not proof that the problem has been solved. It is proof that the regulator considers the risk serious enough to demand vigilance.

A system that needs stronger instructions to identify potential misuse must demonstrate that those instructions lead to meaningful scrutiny, not just another layer of procedural compliance.

3. Jaypee Infratech: when an approved resolution plan still leaves homebuyers asking questions

Few cases illustrate the distance between an insolvency milestone and the lived experience of homebuyers as sharply as Jaypee Infratech.

The company entered corporate insolvency proceedings in August 2017. The NCLT approved the resolution plan submitted by Suraksha Realty and Lakshdeep Investments and Finance on 7 March 2023. The process was intended to give the distressed developer a path forward and bring relief to homebuyers awaiting their properties.

But a tribunal-approved plan is only one stage in a long chain of implementation. Construction, financing, approvals, monitoring and actual handover remain essential.

In October 2026, fresh concerns emerged about implementation.

According to an Economic Times report published on 8 October 2026, an independent expert committee examining homebuyers’ grievances regarding Jaypee projects reported substantial concerns over delays, construction quality, labour availability, the use of funds and compliance with resolution-plan obligations.

The report covered 97 stalled projects involving 10,164 residential units. It said the resolution plan envisaged approximately ₹3,000 crore in working capital within 90 days. The committee reportedly found that the required sanctioned working capital had not been arranged as contemplated.

It also raised concerns about labour deployment. Against an indicated requirement of around 12,000 workers, the committee reported that approximately 3,500–4,000 were being deployed.

The committee further raised concerns about the diversion of funds towards associated entities and investments in mutual funds, and questioned the effectiveness of the project monitoring arrangements. These are serious findings and allegations that demand careful investigation and an evidence-based response.

Suraksha’s executive director disputed the committee report’s interpretation of the resolution plan and said the company was following the plan. That response is important: the committee’s reported observations should not be confused with a final judicial determination of wrongdoing.

Nevertheless, the broader question is impossible to avoid.

If a resolution plan is approved to revive a housing project, how can buyers be expected to judge success by the approval order alone when construction, financing and possession remain contested years later?

For the homebuyer, the commercial logic of an insolvency transaction offers little comfort unless it results in delivery.

The buyer did not invest in a resolution applicant’s acquisition strategy. The buyer booked a home.

The distinction between the two is precisely why monitoring and enforcement matter. A resolution plan that exists on paper cannot substitute for a functioning construction site, sufficient financing, quality control and legally deliverable possession.

If the monitoring mechanism is ineffective, if capital commitments are disputed or unmet, or if the work progresses inadequately, the very purpose of the rescue becomes questionable.

The public interest is not served simply because control changes hands. It is served when the promised outcome becomes real.

The late-claim problem makes the Jaypee case even more troubling

The Jaypee proceedings also expose another difficulty: the consequences for homebuyers who miss the insolvency claims process.

In a Supreme Court order dated 7 November 2025 in the connected Jaypee matters, the Court clarified that its earlier order merely permitted certain homebuyers to submit refund or allotment claims before the successful resolution applicant. It did not impose a blanket obligation on that applicant to accept all such claims.

The Court observed, in substance, that the consideration of late refund claims at that stage depended on the resolution applicant’s willingness; it was not an automatic entitlement for every claimant who had failed to submit a claim during the insolvency process.

This was a procedural clarification concerning late claims, not a finding that the resolution applicant had committed fraud. But it illustrates the harsh consequences that can follow from the interaction of insolvency deadlines and homebuyer expectations.

A buyer may have paid money years earlier, yet whether that buyer obtains relief can depend on whether a claim was filed and recognised within the relevant process, the terms of the approved plan and the applicable judicial directions.

There are legitimate reasons for claim deadlines. Insolvency cannot remain indefinitely open to fresh demands, and a successful resolution applicant must be able to identify its liabilities.

But a housing system must confront the human consequences of those rules. Buyers may be dealing with incomplete information, changing project entities, defective communication, disputes over allotment records or the mistaken belief that payment records automatically establish a recognised insolvency claim.

If the system insists on deadlines, it must also ensure transparent disclosure, reliable communication and accessible procedures.

Otherwise, the process risks creating an extraordinary result: the failure to complete a home becomes a crisis for the buyer, and the failure to file the right paperwork on time can become a second crisis.

4. Amrapali: what a forensic-audit record tells us about the danger of weak accountability

Jaypee is not the only case that raises questions about the protection of homebuyers’ money.

In its judgment of 23 July 2019 in Bikram Chatterji v. Union of India, concerning Amrapali Group projects in Noida and Greater Noida, the Supreme Court examined serious failures affecting homebuyers.

The judgment referred to buyers who had paid substantial portions of the purchase price, missed possession deadlines and continued facing financial pressure despite the non-delivery of their apartments. It also recorded the role of insolvency proceedings involving an Amrapali company and the effect of the resulting moratorium on other legal proceedings.

The Court’s judgment reproduced a summary of forensic-audit findings concerning the group’s financial affairs. Among the matters described were suspected bogus bills amounting to approximately ₹837 crore, inter-corporate deposits of approximately ₹3,000 crore to related entities and approximately ₹500 crore to unrelated entities or trusted partners, along with alleged undervaluation of flats and other questionable transactions.

These figures should be understood in their proper context: they appear in the forensic-audit material reproduced in the judgment, and the legal status of particular transactions or offences must be established through the relevant proceedings. They should not be casually treated as a final criminal conviction against every person associated with the group.

Even with that qualification, the record is disturbing.

Money paid by homebuyers should finance the development commitments for which it was collected, subject to the applicable law and contractual arrangements. When forensic scrutiny reveals concerns about related-party transfers, unexplained payments or the movement of funds away from the intended project, the issue is no longer merely whether construction has been delayed.

It becomes a question of financial accountability.

Who approved the transactions? What did the company’s books disclose? Were the arrangements commercially justified? Were appropriate controls in place? What assets remain available? Which persons, if any, bear individual legal responsibility? And what mechanisms are available to recover money or secure the completion of homes?

These are precisely the questions that cannot be answered merely by replacing one management team with another.

In the Amrapali litigation, the Supreme Court had to intervene to address the consequences of the crisis and the interests of the buyers. The case demonstrates why the insolvency process, standing alone, should not be mistaken for a complete substitute for forensic investigation, regulatory enforcement and effective project completion.

A corporate debtor can be financially reorganised. But if suspected financial misconduct is not adequately examined, the trail of responsibility can become harder for ordinary homebuyers to follow.

That is the danger of confusing corporate resolution with accountability.

5. The NCLT cannot promise a home merely by approving a resolution plan

The NCLT is a statutory adjudicatory body. It is not, by itself, the construction contractor, lender, municipal authority, quality inspector or project-financing institution.

Its function in insolvency includes deciding matters assigned to it by the IBC and overseeing the statutory process. The committee of creditors evaluates and votes on a resolution plan within the framework laid down by law. An approved plan must then be implemented by the relevant parties.

This division of responsibility is legally important. It would be wrong to declare that every adverse outcome is proof of judicial misconduct or that the NCLT deliberately enables fraud.

Yet institutional boundaries cannot become an excuse for a system in which nobody is clearly answerable for the final result.

If the tribunal approves a plan but the project does not progress as promised, what is the effective route to enforce compliance? Who must report the shortfall? Which authority independently verifies that funds are used for the approved purpose? What happens when an implementation or monitoring committee proves ineffective? What consequences follow from a genuine and material breach?

These questions must have practical answers.

Otherwise, the public is left watching a relay race in which each institution points to another: the tribunal approved the plan, the creditors voted for it, the insolvency professional conducted the process, the new management assumed control, and the authorities oversee their own respective permissions.

Meanwhile, the buyer still has no keys.

The problem is not that corporate resolution has no value. It is that the value of a resolution for a real estate company should not be measured solely by the completion of insolvency formalities.

For an operating factory, revival may be measured through production, employment and financial stability. For a housing project, those considerations still matter, but they are insufficient. The ultimate test also includes whether the homes promised to buyers become habitable and legally deliverable.

A resolution process that does not adequately measure this distinction risks prioritising the rehabilitation of the corporate structure over the obligations that gave the project its social and commercial purpose.

6. Homebuyers are financial creditors, but their interests are not identical to those of banks

The law’s recognition of homebuyers as financial creditors was an essential improvement. It allowed them to participate in insolvency proceedings rather than remain entirely outside the creditor framework.

But the interests of homebuyers and institutional lenders are not always the same.

A bank generally seeks recovery, restructuring, repayment or value maximisation in accordance with its exposure. A homebuyer may primarily want possession of a specific apartment that has become central to the family’s future.

A resolution plan can be commercially rational for the corporate debtor while leaving difficult questions for individual buyers whose preferred remedy is possession rather than financial recovery.

This tension becomes especially serious when a company operates multiple projects, some completed or substantially complete and others stalled.

The Supreme Court confronted this broader problem in Mansi Brar Fernandes v. Shubha Sharma, decided on 12 September 2025. The judgment reiterated that the IBC is a collective insolvency mechanism and not a debt-recovery instrument or bargaining chip for individual disputes. It also recognised persistent problems of delayed projects and inadequate accountability.

Importantly, the Court directed the development of specific guidelines for real estate insolvency, including timelines for project-wise corporate insolvency resolution and safeguards for allottees. It stated that resolution should ordinarily proceed on a project-specific basis, rather than automatically encompassing the entire corporate debtor, unless circumstances justify a broader approach.

Why does that matter?

Because a developer may have several projects at different stages of completion. If one project is distressed, indiscriminately drawing solvent or unrelated projects into the insolvency process may harm buyers whose developments were otherwise viable.

Conversely, isolating one project without properly examining related entities, inter-project financial links or the possibility of fraud could leave assets or liabilities outside an appropriate investigation.

The solution is not to make project-wise insolvency an inflexible rule. It is to demand evidence-based decisions, documented reasons and safeguards that prevent either form of manipulation.

For a decade, the insolvency system has had to learn how to reconcile the corporate debtor’s financial structure with the reality that a homebuyer’s interest is usually tied to a specific project and a specific unit.

That is a substantial institutional challenge. It is also an admission that the ordinary corporate insolvency model is not enough on its own.

7. The Supreme Court itself has demanded urgent reform

The September 2025 Mansi Brar Fernandes judgment is significant for another reason.

The Court directed vacancies in the NCLT and NCLAT to be filled on a war footing and called for improvements in infrastructure. It referred to the closure of the Chandigarh NCLT and parts of the Delhi NCLT because of water seepage in courtrooms and chambers.

That is a striking picture for a country whose insolvency law depends on timely decisions.

A time-sensitive corporate rescue system cannot deliver predictable outcomes if it lacks adequate adjudicatory capacity. Delays can undermine the value of distressed assets, increase costs and prolong uncertainty for all stakeholders.

For homebuyers, time is not an abstract administrative variable. Every additional month can mean rent, EMIs, interest costs, disrupted family plans and a longer wait for possession.

In April 2026, an IBBI committee submitted a report on guidelines for insolvency proceedings in the real estate sector. According to the regulator’s published material, the committee examined 55 issues and made 155 recommendations.

The exercise was prompted by the Supreme Court’s directions and focused on issues such as project-wise proceedings, timelines, the interests of genuine homebuyers and coordination with real estate regulation.

In June 2026, IBBI also published a discussion paper on strengthening resolution outcomes in real estate insolvency.

These developments matter because they expose the limitations of treating real estate insolvency as just another corporate bankruptcy.

Nearly a decade after the IBC came into force, the sector still requires detailed work on how projects should be separated, how homebuyers should be protected and how resolution should be made completion-oriented.

The reform process is welcome. But it also invites an uncomfortable question: why did a sector involving people’s homes require so much additional institutional attention before the machinery of insolvency could adequately respond to its distinctive problems?

The answer lies partly in the nature of the asset, the financing structure and the different objectives of the stakeholders. It also lies in whether the law’s original design sufficiently anticipated the practical consequences of allowing the insolvency of a corporate developer to shape the future of hundreds or thousands of residential buyers.

Recognising a weakness is an important first step. Delivering a remedy is the harder part.

8. The 100-homebuyer threshold: protection against misuse or another obstacle for genuine buyers?

Under Section 7 of the IBC, a group of real estate allottees seeking to initiate corporate insolvency proceedings must generally meet the statutory threshold of at least 100 allottees or 10% of the total allottees in the same project, whichever is less.

The Supreme Court upheld the relevant statutory threshold in Manish Kumar v. Union of India in January 2021.

The policy rationale is understandable. A single speculative investor should not be able to threaten the insolvency of an entire real estate project merely to obtain a preferred exit or repayment arrangement. Insolvency can affect other buyers, creditors, employees and the value of the project itself.

But a threshold is not cost-free.

Getting homebuyers organised requires coordination. Buyers may live in different cities, have different financial circumstances, hold different allotment documents or disagree about whether the appropriate remedy is possession or refund. Some may not know the legal position until proceedings have already begun.

A threshold designed to prevent frivolous or strategic applications must therefore be accompanied by reliable disclosure, accessible records and clear guidance about the remedies available to buyers.

Nor should the threshold be misunderstood as proof that the complaints of a smaller group are unimportant. It restricts access to one particular collective insolvency route; it does not declare that smaller groups have no grievances or no remedies under other applicable laws.

The policy challenge is to deter opportunistic insolvency filings without turning statutory compliance into an avoidable barrier for people facing genuine default.

That balance requires careful implementation, not slogans about either unlimited homebuyer rights or unfettered corporate rescue.

9. The real accountability test: what happens after admission and approval?

Much public discussion about insolvency focuses on the entry point: a creditor files an application, the NCLT admits the matter, and the corporate insolvency resolution process begins.

But admission is not the end of the story.

For the homebuyer, the decisive questions come later. Is the claim accurately recorded? Is the project’s financial position transparently disclosed? Are related-party transactions examined where necessary? Is the resolution plan realistically financed? Are construction milestones measurable? Are promised funds available? Is progress independently verified? What happens if the successful resolution applicant fails to meet an obligation?

A credible system must not merely identify distress. It must make the resolution process accountable for what follows.

That does not mean the tribunal should guarantee every construction outcome or substitute its judgment for every technical decision. It means that a resolution framework involving residential property must provide sufficiently clear mechanisms to monitor compliance and address material departures from an approved plan.

The same applies to insolvency professionals. Their role cannot be reduced to collecting claims, preparing information memoranda and conducting procedural steps. Where records reveal credible warning signs, the IBBI’s September 2026 circular underscores the importance of further inquiry and, where justified, an application to the adjudicating authority.

A professional’s duty to examine concerns does not establish that wrongdoing has occurred. But it makes scrutiny a central part of the process.

The objective should be straightforward: financial distress must not become a convenient reason for abandoning transparency.

Where funds have been diverted, the movement of the money must be investigated. Where related-party transactions are material, they must be scrutinised. Where working-capital commitments are contested, the available evidence must be examined. Where construction is behind schedule, buyers must receive accurate information about progress and a credible route to compliance.

Without these safeguards, the system risks rewarding procedural completion while leaving substantive failure unresolved.

10. The most dangerous possibility is not insolvency itself—it is insolvency without meaningful accountability

Real estate companies may fail for legitimate commercial reasons. A downturn, excessive leverage, delayed approvals, rising costs, inadequate financing or litigation can render a project unviable. Rescue can be better than liquidation, especially where a viable project can still be completed.

That is why the claim that the NCLT is inherently a licence for scams would be too broad.

The more defensible criticism is that insolvency protection, when combined with weak implementation, poor transparency or ineffective enforcement, can create conditions in which the consequences for homebuyers are far less immediate than the consequences for the distressed corporate structure.

The September 2026 IBBI circular makes clear that regulators are concerned about the possible misuse of insolvency for purposes other than genuine resolution. The Amrapali litigation shows why detailed examination of financial transactions matters. The Jaypee developments demonstrate why an approved resolution plan must be judged against implementation and delivery. The Supreme Court’s 2025 directions confirm that real estate insolvency needs stronger sector-specific safeguards.

Taken together, these developments do not establish that the insolvency system is a scam or that every builder is dishonest. They establish something more precise, and more difficult for policymakers to dismiss: the machinery of insolvency cannot be considered successful merely because a corporate debtor receives a new management structure or an approved plan.

Where the outcome involves thousands of homes, the test must include the position of the people who paid for them.

A resolution plan that leaves buyers without an effective remedy, or which is inadequately monitored after approval, risks converting a collective rescue mechanism into a system whose formal achievements are disconnected from its human consequences.

That is the gap the law must close.

11. What needs to change if the system is to deserve public confidence?

First, real estate insolvency should be approached with a clear presumption in favour of project-specific examination, subject to justified exceptions where projects are financially or operationally interlinked. The objective should be to protect viable developments without creating artificial boundaries that conceal related-party dealings or shared liabilities.

Second, project finances must be transparent enough to trace money into and out of the relevant development. Separate project records and appropriate banking arrangements can help make it possible to establish whether receipts are supporting the projects for which they were collected.

Third, resolution plans must be evaluated for practical feasibility, not simply the attractiveness of a bid or the prospect of recovering value. Funding commitments, completion schedules, approvals, labour requirements and the ability to deliver habitable units should be examined with the seriousness demanded by the scale of the undertaking.

Fourth, monitoring must be meaningful. The responsible parties should disclose progress against identifiable milestones, explain material deviations and provide verifiable financial information. Where material breaches are established, there must be an effective route to seek appropriate directions and enforce the approved plan.

Fifth, homebuyers need reliable notification and claims processes. Deadlines may be necessary, but the consequences of missing a deadline should not be obscured by confusing records, inadequate communication or assumptions that a payment receipt alone guarantees recognition within insolvency proceedings.

Sixth, credible evidence of misconduct must not disappear behind the corporate rescue process. The IBC should not be treated as a replacement for relevant criminal, regulatory, forensic or recovery proceedings. Questions about individual liability must be investigated and determined under the applicable law, rather than assumed away or presumed merely because a company has entered insolvency.

Finally, the tribunals and regulatory institutions that administer this framework need adequate staffing, infrastructure, expertise and coordination. A law that promises timely resolution cannot deliver that promise without a system capable of adjudicating and monitoring cases efficiently.

None of these reforms requires treating every distressed developer as a fraudster. They require treating homebuyers as stakeholders whose interests deserve to be protected through the actual outcome of the process, not just through their formal classification in the law.

Conclusion: A resolution order is not a set of house keys

The NCLT was not established to legitimise scams. The IBC was not enacted to reward deliberate default. And a corporate insolvency process is not, by itself, proof of criminal conduct.

But institutions must be judged by more than their stated purposes.

When projects remain stalled after years of proceedings, when buyers confront uncertainty about their claims, when serious financial questions demand forensic scrutiny, and when a regulator itself warns against misuse of the insolvency framework, the public is entitled to ask whether the safeguards are strong enough.

The Jaypee case offers a particularly uncomfortable illustration. An insolvency process that began in 2017, a resolution plan approved in 2023 and later assurances of revival have not prevented fresh concerns about financing, construction and implementation from emerging in 2026. The resolution applicant disputes the interpretation of the plan, and the reported findings must be assessed through the relevant proceedings. Nevertheless, the continued controversy makes one point unmistakable: approval and implementation are not the same thing.

Amrapali, meanwhile, demonstrates why corporate distress cannot be separated from questions about financial conduct and the destination of buyers’ money.

The proper response is not to abolish insolvency proceedings, to condemn every resolution applicant or to accuse the NCLT of complicity without evidence. It is to demand a system in which a successful resolution means more than a change in ownership, a redistribution of financial claims or a technically completed legal process.

A country’s insolvency framework should be capable of rescuing viable companies without sacrificing the interests of the people who financed their development. It should distinguish genuine business failure from deliberate misconduct, preserve value without ignoring accountability, and ensure that credible breaches have meaningful consequences.

The ultimate standard is not how many plans are approved or how quickly a corporate debtor exits insolvency.

It is whether the framework delivers the outcomes it was supposed to secure—and whether the people who paid for their homes are left with a credible, enforceable path to possession or other lawful relief.

Until that standard is met, the question will continue to haunt India’s insolvency regime:

When a builder fails and the NCLT steps in, is the system truly rescuing the project—or merely rescuing the corporate structure while the homebuyer is left to finance the consequences?