new delhi, April 27 -- Real estate bankruptcies may be resolved project by project, and healthy projects of stressed builders spared the bankruptcy court, if a top committee's suggestions bear fruit. The two suggestions are among the committee's 155 recommendations aimed to make real estate rescues more efficient, consistent, predictable and effective, two people aware of the matter said. The committee, set up by the Insolvency and Bankruptcy Board of India (IBBI), recommended that the ministry of corporate affairs, department of financial services and real estate regulatory bodies jointly lay down the framework for project-wise real estate debt resolution. Completed or substantially completed projects should be excluded from assets available for bankruptcy resolution, said the committee. The IBBI had formed the eight-member panel led by wholetime director Jayanti Prasad following a direction issued by the Supreme Court in September 2025. Project-wise resolution protects home buyers in financially healthy projects when the builder goes down, and thus, from possible haircuts or delays in getting their homes. Real estate and construction together account for 44% of the over 8,800 companies so far admitted in tribunals under the bankruptcy code, the second largest class of stressed businesses after manufacturing, as per data available from IBBI. The recommendations aim to improve the confidence of home buyers, creditors and investors. Queries emailed to the ministry of corporate affairs and IBBI went unanswered. The expert committee's recommendations are timely and directionally significant for restoring confidence in real estate insolvency resolution, said Niranjan Hiranandani, chairman of National Real Estate Development Council (Naredco), a self-regulatory body set up under the Ministry of Housing and Urban Affairs. "Project-wise resolution, ring-fencing of project assets and cash flows, and exclusion of completed or substantially completed projects from the insolvency estate will help protect genuine homebuyers while ensuring that viable projects are not dragged into avoidable uncertainty," Hiranandani said. "For the real estate sector, liquidation must remain the last resort. The focus should be on completion of projects, preservation of value and time-bound delivery to homebuyers. A project-specific approach will bring greater clarity, reduce litigation and enable resolution applicants, lenders and allottees to evaluate each project on its own merits." According to the people cited above, who spoke on the condition of anonymity, the panel said each project of a stressed builder must be resolved independently. Corporate-level bankruptcies covering all projects must be pursued only where the builder is found to have engaged in fraud, mixed funds between projects, or used one project as collateral to borrow for another. In such cases, tribunals must specify the reasons for not following the project-wise approach. The existing Insolvency and Bankruptcy Code (IBC) has no provision for project-wise debt resolution for real estate; however, once a developer is admitted for bankruptcy resolution, project-wise bidding for fresh investment is allowed under IBBI regulations. This does not spare the healthy projects from becoming part of the bankruptcy estate, which the new recommendations seek to change. Currently, a builder can be taken to insolvency court if he defaults on an amount of Rs.1 crore. The panel suggested raising this to Rs.5 crore, considering the scale of real estate projects, which often run into hundreds or even thousands of crores....