Right to Housing as a Fundamental Right under Article 21

Right to Housing as a Fundamental Right under Article 21: Supreme Court’s Landmark Ruling

The Right to Housing under Article 21 of the Indian Constitution is recognized as part of the Right to Life, ensuring dignity, shelter, and social justice.

Table of Contents

On September 13, 2025, the Supreme Court of India issued a significant judgment in a case pertaining to insolvency procedures involving two real estate companies. A bench of Justices J.B. Pardiwala and R. Mahadevan determined that the right to housing constitutes a fundamental right under Article 21 of the Constitution, equating it with the rights to life and dignity. The Court acknowledged the difficulties faced by millions of homebuyers and instructed the Union Government to promptly establish a revival fund for halted projects, enhance the SWAMIH Fund, and implement more robust institutional measures to protect legitimate buyers from the exploitative application of insolvency rules.

Right to Housing as a Fundamental Right

The Predicament of Homebuyers

The Court emphasised the dire circumstances encountered by middle-class people, many of whom use their life assets in the quest for housing.
The Court upheld the National Company Law Appellate Tribunal’s (NCLAT) earlier decision rejecting the claims of speculative investors, while making it clear that housing is not a luxury or a speculative instrument, but a basic human need.
Dual obligation: Purchasers have a responsibility to pay both equated monthly instalments and rent during the interim period before possession.
Stalled projects: Prolonged delays frequently extend for years, diminishing the “dream home” to an incomplete structure.
Constitutional Obligation: The Court highlighted that the timely possession of housing is required by Article 21, and the State cannot act as a “silent spectator” when the dignity and financial security of persons are jeopardised.

Revival Fund and Expansion of SWAMIH Fund

A major aspect of the verdict is the Court’s demand for financial reforms:

SWAMIH Fund Expansion: The Court advocated for the enhancement of the Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund or the establishment of a Revival Fund under NARCL to facilitate final financing for stalled projects.
CAG Audits: Funds must undergo regular audits by the Comptroller and Auditor General (CAG), with results disclosed in accessible formats for citizens.
Affordable Housing Linkage: Unutilized stock from revived projects may be allocated for initiatives such as PMAY (Pradhan Mantri Awas Yojana) or government housing, thereby tackling both stalled projects and housing deficits.

Mitigating Speculative Abuse of Insolvency Laws

The ruling clearly differentiated between authentic homebuyers and speculative investors:

Speculative investors: Individuals engaging in repurchase or high-return schemes without the intention of acquiring ownership cannot exploit the Insolvency and Bankruptcy Code (IBC) as a means of recovery.
Alternative remedies: Such investors should pursue redress under Consumer Protection Laws, RERA, or civil courts.
Homebuyers’ priority: The verdict protects individuals who acquire properties for personal residence rather than for financial gain.

Enhancing Tribunals and the Real Estate Regulatory Authority

The Court promulgated 12 mandatory directives to enhance institutional frameworks:

Prioritise the filling of vacancies in the NCLT and NCLAT.
Establish specialised IBC benches for real estate matters.
Enhance tribunal infrastructure with compliance reports expected within three months.
Provide the RERA authority with sufficient personnel, legal specialists, and financial resources.
Initiate insolvency proceedings on a project-specific basis to safeguard viable ventures.
Require escrow accounts with incremental disbursements linked to construction advancement.
Register property transactions with revenue authorities at the completion of a 20% payment.
Mandate that senior citizens provide sworn evidence when diverging from the Model RERA Agreement.
Initiatives to guarantee transparency, accountability, and expedited implementation of tribunal and RERA rulings. (9 to 12)

High-Level Reform Committee

The Court mandated the Centre to form a high-level committee within three months, presided over by a former High Court judge, comprising:

Ministry of Law, Ministry of Housing, NITI Aayog, NIUA, Indian Institutes of Management, and industry representatives.
Directive: Propose comprehensive reforms to enhance transparency, accountability, and integrity within the real estate industry.

The Right to Housing and the Indian Constitution

Although the Constitution does not clearly articulate the Right to Housing, the Supreme Court has progressively interpreted it as encompassed under Article 21.
Olga Tellis v. Bombay Municipal Corporation (1985) – acknowledged the right to livelihood and shelter as essential to existence.
Chameli Singh v. State of U.P. (1996) specifically affirmed that the right to shelter constitutes a fundamental right under Article 21.
Shantistar Builders v. Narayan Khimalal Totame (1990) – confirmed that housing is fundamental to human dignity.
The current verdict strengthens this legal precedent, establishing housing as a fundamental right rather than a simple commercial privilege.

Right to Housing as a Fundamental Right under Article 21

Comparative International Examination

Worldwide, housing is progressively seen as a fundamental human right.
The Universal Declaration of Human Rights (1948), Article 25, acknowledges suitable housing as an integral component of the right to a standard of living.
International Covenant on Economic, Social and Cultural Rights (ICESCR), Article 11: Requires States to guarantee adequate housing.
South Africa’s Constitution clearly protects the right to adequate housing (Section 26).
The European Court of Human Rights determined in cases such as Yordanova v. Bulgaria (2012) that eviction without alternatives contravened Article 8, which protects the right to private and family life.
India’s verdict corresponds with the global acknowledgement of housing as a fundamental right, situating it at the confluence of constitutional law and human rights law.

Influence on the Real Estate Industry

For homebuyers: Improved safeguards, prompt acquisition, and legal remedies.
For developers: Enhanced compliance and financial accountability.
For the government: Enhanced accountability in upholding housing rights and facilitating financial revitalisation.
For investors: Restriction of speculative activities and well-defined regulatory parameters.

Conclusion

The Supreme Court’s 2025 decision signifies a fundamental change in Indian real estate law. By designating housing as a fundamental right under Article 21, the Court has transformed the issue from simple contractual disputes to matters of constitutional significance.
If properly executed, the judgment can reinstate trust in the housing market, protect millions of homebuyers, and align India with international norms regarding housing as a fundamental human right.
The message is unequivocal: A house transcends mere walls and mortar; it embodies the foundation of dignity, security, and fundamental welfare.