The Supreme Court has issued a stern warning to the directors of real estate developer Parsvnath Developers, making it clear that the company’s ongoing insolvency proceedings cannot be invoked as a defence for failing to comply with orders concerning the dues of homebuyers.
A Bench comprising Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana was hearing petitions filed by senior citizens who have been awaiting possession of flats in the Parsvnath Exotica project in Gurugram for more than two decades, despite having paid the entire consideration.
The Court had earlier issued a series of coercive directions against the developer’s directors, including orders for their appearance and the freezing of their personal bank accounts. It had also sought compliance affidavits from senior Haryana government and police officials after expressing concern over the alleged failure of authorities to enforce orders passed by the Haryana Real Estate Regulatory Authority (HRERA).
During the hearing, Senior Additional Advocate General Lokesh Singhal informed the Court that affidavits had been filed by the Haryana Chief Secretary, the Director General of Police and most Deputy Commissioners.
Appearing for Parsvnath Developers, Senior Advocate Narendra Hooda submitted that the company had been undergoing insolvency proceedings since April 30, 2026.
The submission drew a sharp response from the Bench. The Court made it clear that the pendency of insolvency proceedings would not absolve the company or its directors from complying with judicial directions and meeting their obligations towards homebuyers.
Senior Advocate Priya Hingorani, representing the petitioners, pointed out that Parsvnath Hessa Developers was not undergoing insolvency proceedings. She emphasised that the affected homebuyers included senior citizens and young couples who had invested their lifetime savings in the project.
The Court warned the company’s directors that continued non-compliance could invite severe consequences, including imprisonment, referring to the action taken in the Unitech matter.
The Bench also directed that its earlier order freezing the personal bank accounts of the directors would remain in force. When the respondents indicated their inability to make the required deposit in view of the account-freezing order, the Court asked them to place on affidavit whether they were prepared to deposit the entire amount.
The petitioners further pointed out that the freezing order covered accounts maintained in Punjab and Haryana, while the directors also held bank accounts in Delhi.
The proceedings arise from the prolonged failure to deliver homes to buyers despite the passage of more than two decades. The Supreme Court’s latest intervention reflects its growing concern over the inability of regulatory and enforcement mechanisms to secure compliance with orders passed in favour of homebuyers.
The Court has made it clear that corporate insolvency proceedings cannot be used as a mechanism to indefinitely evade compliance with binding directions or frustrate the rights of homebuyers who have already parted with their money.
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