Joint CIRP under IBC for Real Estate Developers : Consolidated Insolvency for Homebuyer Relief
India’s real estate sector continues to struggle with thousands of stalled projects and prolonged possession delays.
As a result, millions of homebuyers face financial distress, uncertainty, and endless litigation.
Joint CIRP under IBC for real estate developers offers a powerful legal solution by enabling consolidated insolvency proceedings against multiple group entities responsible for interconnected real estate projects.
Instead of initiating separate cases against each company, homebuyers and creditors can pursue a unified insolvency process.
Consequently, this mechanism prevents promoters from shifting liabilities across subsidiaries and shell entities. More importantly, it ensures faster resolution and meaningful relief.
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What Is Joint CIRP under IBC for Real Estate Developers?
Joint CIRP under IBC for real estate developers refers to consolidated insolvency proceedings initiated against multiple group companies involved in the same real estate project or business structure. These entities may include the parent developer, construction arm, landholding company, and marketing subsidiary.
Under Section 60(2) to Section 60(5) of the Insolvency and Bankruptcy Code, 2016, the National Company Law Tribunal (NCLT) can exercise jurisdiction over all insolvency matters related to the corporate debtor and its group entities.
Therefore, NCLT can treat such companies as a single economic unit for resolution.
Why Joint CIRP under IBC Is Crucial for Real Estate Projects?
Real estate developers often operate through multiple special-purpose vehicles (SPVs).
However, promoters frequently isolate assets in one entity and liabilities in another.
Consequently, a single-company CIRP becomes ineffective.
Joint CIRP under IBC for real estate developers solves this problem by:
Consolidating assets and liabilities
Preventing value erosion
Avoiding parallel proceedings
Maximising recovery for homebuyers
Moreover, joint proceedings enable resolution professionals to revive projects holistically rather than piecemeal.
Legal Basis for Joint CIRP under IBC
Section 60(2) :Common Forum
Section 60(2) designates NCLT as the forum for insolvency proceedings involving corporate debtors and personal guarantors.
Therefore, all connected insolvency matters remain before one bench.
Section 60(5) : Residuary Jurisdiction
Section 60(5)(a)–(c) empowers NCLT to decide any question of law or fact arising out of or in relation to insolvency resolution.
Accordingly, NCLT can permit a Joint CIRP under IBC for real estate developers where a clear nexus exists.
Homebuyers as Financial Creditors under IBC
Therefore, homebuyers can file insolvency applications under Section 7 of the IBC.
To initiate CIRP:
Minimum 100 allottees, or
10% of the total allottees in a project
Moreover, homebuyers may jointly file petitions against multiple group entities, thereby triggering Joint CIRP under IBC for real estate developers.
Supreme Court Guidance on Joint CIRP
Tata Consultancy Services v. Vishal Ghisulal Jain (2021)
The Supreme Court held that NCLT may adjudicate disputes having a direct nexus with insolvency.
Consequently, arbitration clauses cannot defeat insolvency jurisdiction.
Embassy Property Developments v. State of Karnataka (2020)
The Court clarified that NCLT’s powers extend only to insolvency-related matters.
Therefore, purely pre-insolvency disputes fall outside its scope.
Together, these rulings strengthen the foundation for Joint CIRP under IBC for real estate developers.
Landmark Joint CIRP Cases in Real Estate
Jaypee Infratech Case
NCLT consolidated the insolvency of Jaypee Infratech and Jaiprakash Associates.
As a result, over 20,000 homebuyers obtained structured relief.
Unitech Group
NCLT admitted the joint insolvency of multiple subsidiaries and imposed a group-wide moratorium.
Supertech Group
Authorities initiated joint proceedings against developer entities and land SPVs, protecting thousands of allottees.
These cases demonstrate how Joint CIRP under IBC for real estate developers prevents fragmentation.
Reverse CIRP : A Homebuyer-Centric Innovation
Recent regulatory amendments introduced Reverse CIRP for real estate projects. Under this model:
Resolution professional prioritises project completion
Possession is delivered before financial restructuring
CoC approves handover with 66% voting
Therefore, Reverse CIRP aligns insolvency resolution with homebuyer interests.
How Joint CIRP Works : Step-by-Step
Filing Section 7 application
NCLT admission and moratorium
Appointment of IRP/RP
Formation of CoC
Consolidated information memorandum
Resolution plan approval
NCLT sanction
Consequently, all group entities move through one coordinated process.
Benefits of Joint CIRP under IBC for Real Estate Developers
Faster possession or refunds
Access to group assets
Stronger bargaining power
Prevention of promoter manipulation
Higher recovery rates
Therefore, joint insolvency becomes the most effective remedy for large-scale real estate distress.
Why Choose Anirudh Associates for Joint CIRP Matters?
Anirudh Associates represents homebuyers and creditors in complex group insolvency cases.
With a proven track record in major real estate resolutions, the firm ensures strategic and timely relief.
