‘RWA Cannot Intervene Under Section 7’: Supreme Court Makes Landmark Observation on Bankruptcy Proceedings
New Delhi: The Supreme Court has delivered a significant ruling on financial bankruptcy, clarifying that Resident Welfare Associations (RWAs) or any housing societies cannot intervene when a bank or financial institution initiates insolvency proceedings against a real estate developer. The Court emphasized that such matters fall strictly between the creditor and the debtor.
Bench ObservationsA bench comprising Justices J.B. Pardiwala and R. Mahadevan noted during the hearing that when a company is subjected to insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code (IBC), the matter is exclusively between the lender and the borrower. Consequently, third-party organizations like RWAs or housing societies have no right to participate, either at the initial hearing or ...









