Vol 23 (2026) - Issue 2

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From Liquidation to Completion: The Transformative Role of Reverse Corporate Insolvency Resolution Process

Synopsis
The Reverse Corporate Insolvency Resolution Process (Reverse CIRP) has developed as a judicially established process inside India’s insolvency framework to tackle the distinct challenges of halted real-estate projects.
The Insolvency and Bankruptcy Code (IBC), 2016 establishes a systematic framework for addressing corporate distress via the Corporate Insolvency Resolution Process (CIRP); however, its traditional implementation frequently falls short in safeguarding the interests of homebuyers, who are now acknowledged as financial creditors. Reverse CIRP aims to prioritise project completion rather than liquidation by permitting promoters or third-party financiers to inject capital solely for the completion of outstanding real estate projects, under the oversight of an insolvency professional and the Committee of Creditors (CoC). This study examines significant judicial interventions such as Flat Buyers Association v Umang Realtech Pvt. Ltd., Rajesh Goyal v Babita Gupta, and Anand Murti v Soni Infratech Pvt. Ltd., elucidating the evolution, logic, and operational parameters of this theory. The system has enabled prompt unit delivery and improved consumer protection; nevertheless, it also presents issues regarding promoter eligibility, transparency, fund governance, and the lack of regulatory codification. The report advocates for the official legislative integration of Reverse CIRP, linkage with RERA, improved monitoring and accountability frameworks, and capacity enhancement for insolvency professionals. Ultimately, Reverse CIRP signifies a transformative yet transitional methodology that redirects attention from asset liquidation to stakeholder focused resolution, particularly for homebuyers, and emphasises the necessity for a comprehensive statutory and regulatory framework to guarantee consistency, equity, and long-term effectiveness in real estate insolvency matters.