The tension between a real estate developer’s plea to save a project and a lender’s right to recover dues has been a recurring theme in Indian courts. On Thursday, the Supreme Court in a judgement clarified that when a real estate project faces insolvency, the stage of completion of a project cannot be a ground to halt the legal process.
The verdict by a bench comprising Justices J B Pardiwala and R Mahadevan in Elegna Co-op. Housing and Commercial Society Ltd. v. Edelweiss Asset Reconstruction Company Ltd. settles two significant questions: Can a builder avoid insolvency by claiming the project is “substantially complete”? And can a housing society intervene at the outset to stop the insolvency process?
The dispute centred on a…