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Workers stand on a crane at the construction site of a residential complex in Mumbai, India, May 27, 2015.Reuters file

The Supreme Court has banned construction in many states and union territories bringing development to a halt. The move will possibly push people out of work, delay deliveries, and affect property companies and allied industries.

"It will choke supply and impact home seekers. Effectively, home buyers will suffer just because some state governments have not formally notified the policy," said Niranjan Hiranandani, national president of lobby group National Real Estate Development Council (NAREDCO) to the Economic Times.

He also said that the better way would have been to penalise the states and bar new construction while allowing ongoing projects to be completed.

According to the SC, the states and union territories had not framed any policy under the 2016 Solid Waste Management Rules that was brought into effect by the environment ministry in April 2016.

Though Maharashtra has prepared a policy on the issue, it has seen the biggest impact. The state, which is home to the high-value real estate markets of Mumbai and Pune, may be able to get relief on this score, said developers.

"Over 1,000 allied industries across major sectors such as banking, cement, steel, sanitary, tiles and electrical equipment will be impacted severely if the states do not manage to get this stay vacated soon," said Pankaj Kapoor, MD at Liases Foras Real Estate Rating and Research.

Kapoor also mentioned about the annual real estate industry size contributed by Maharashtra. About Rs 1.5 lakh crore to Rs 2 lakh crore is contributed by Maharashtra of the overall annual real estate industry size in India, which is about Rs 10 lakh crore approximately.

The ban on construction will impact the delivery procedure as it will further push the dates of ongoing projects, said the chairman of Anarock Property Consultants, Anuj Puri. "Projects worth Rs 4, 64,300 crore for a total of 575,900 units are already significantly behind schedule and this stern stand of SC may add to this number," he added.