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The Supreme Court has delivered a significant judgment affirming that the Insolvency and Bankruptcy Code (IBC), 2016 cannot be misused as a shield by defaulting developers to obstruct redevelopment projects. The ruling underscores that insolvency protection cannot supersede the constitutional right of residents to live in safe and habitable conditions. Background of the Dispute: Redevelopment of Kher Nagar Sukhsadan Society The case arose from the redevelopment of the Kher Nagar Sukhsadan Co-operative Housing Society in Bandra (East), Mumbai. The society had entered into a redevelopment agreement with AA Estates Private Limited in 2005, followed by a supplementary agreement in 2014. Despite more than a decade passing, no substantial redevelopment work had commenced. In 2017, the Municipal Corporation of Greater Mumbai (MCGM) issued notices declaring the structure unsafe for habitation, forcing residents to continue living in hazardous conditions. After continued delay, the society...

Case Background: Pratibha Tower and Its Controversial History Pratibha Tower was originally a 36-storey luxury residential project in Breach Candy, Mumbai, launched in 1984. It later became the center of a major real estate fraud scandal when authorities found that the developer had overstated the plot area to gain unauthorized Floor Space Index (FSI) benefits. This resulted in illegal additional construction and regulatory intervention. Among the early apartment purchasers were well-known personalities, including Lata Mangeshkar and Asha Bhosale , highlighting the project’s high-profile nature. Litigation Timeline and Demolition 1989 – BMC ordered demolition of the top eight floors . 2019 – The remaining structure was demolished after the cooperative society resolved to redevelop the land. 2022 – Society selected Crest Residency Pvt Ltd (JV: RA Enterprises + Crest Venture) as the new developer. June 2025 – Society member Devyani Gulabsi filed a suit challe...