IBC Protocol: What It Is and How It Affects Indian Property Buyers

When a real estate developer runs out of money and leaves your flat half-built, the IBC protocol, the Insolvency and Bankruptcy Code that handles corporate debt defaults in India steps in. It’s not a magic fix, but it’s the main legal tool that gives homebuyers a shot at getting their money back or seeing their project finished. The IBC protocol treats homebuyers as financial creditors — not just customers — which changed everything after 2016. Before that, buyers were stuck in endless court cases. Now, under the IBC protocol, lenders and buyers can push for resolution through a fast-track process overseen by the National Company Law Tribunal.

That’s where the RERA India, the Real Estate (Regulation and Development) Act that protects homebuyers from fraud and delays comes in. RERA and the IBC protocol don’t compete — they work together. RERA forces builders to register projects and report progress, while the IBC protocol kicks in when a builder collapses financially. If a project gets stuck and the builder can’t pay, RERA’s penalties are enforced through IBC proceedings. You don’t need to file two separate complaints. When an IBC case opens, RERA authorities often join as stakeholders to ensure your rights as a buyer are protected.

What does this mean for you? If your possession date passed two years ago and the builder is silent, the IBC protocol might already be active. You don’t have to wait for someone else to act. You can file a claim as a financial creditor with the resolution professional handling the case. You’ll need your agreement, payment receipts, and RERA registration number. The process isn’t instant — it takes months — but unlike before, there’s a real chance your money gets returned or your flat gets completed. The IBC protocol doesn’t guarantee success, but it gives you a seat at the table when the bank, investors, and builders negotiate your future.

Some builders try to hide behind shell companies or split projects to avoid IBC triggers. That’s why knowing your RERA registration and keeping every receipt matters. The IBC protocol only applies to registered corporate entities, so if your builder is a sole proprietor or unregistered, you’re back to RERA’s complaint route. But if the project was under a company — even a small one — the IBC protocol can be your strongest lever.

Below, you’ll find real guides on how to claim compensation when possession is delayed, how RERA works alongside financial laws, and what steps to take when your builder disappears. These aren’t theoretical tips — they’re based on actual cases where buyers recovered their money or got their homes because they knew how to use the IBC protocol and RERA together.