Delhi-NCR-based developer Supertech, which has several ongoing projects in Noida, Greater Noida, Gurugram and Ghaziabad, went into insolvency on March 25 after the Delhi bench of the National Company Law Tribunal admitted a petition filed by the Union Bank of India for non-payment of dues of Rs 431,92,53,302 as on 31.01.2021.
This order may impact over 25,000 homebuyers who were awaiting possession of their homes booked with the developer for several years. However, Supertech claimed that the company has 38,041 customers out of which 27,111 homes have been delivered.
The NCLT appointed Hitesh Goel as the insolvency resolution professional (IRP) for Supertech under the Insolvency and Bankruptcy Code (IBC). The tribunal had reserved its order in the case on March 17, 2022 after the one time settlement proposed by Supertech was rejected by the bank and arguments were heard.
Reacting to the order, Supertech said that it will be approaching NCLAT in appeal against the order.
“In the matter of appointment of IRP in one of the Supertech Group Companies, by the National Company Law Tribunal (NCLT), management of the Company stated that the Company will be approaching NCLAT in appeal against the order as the matter belongs to a financial creditor. In the interest of homebuyers, preference was given to construction and delivery of projects over repayment of bank dues which can be fulfilled after project completion. As all the projects of the Company are financially viable, there is no chance of loss to any party or financial creditor. The order will not affect operations of any other Supertech Group Company,” it said in a statement.
The company said that the NCLT order will not impact the construction at all ongoing projects or operation of the company and “we are committed to giving delivery of units to allottees. We have a strong record of delivering more than 40000 Flats during the last 7 years and we shall continue to give delivery to our buyers under our “Mission Completion – 2022” under which we have undertaken a target of delivering 7000 Units by December, 2022.”
Once a company is admitted to the corporate insolvency resolution process there is a moratorium on all pending civil, consumer, RERA cases, including executions till resolution is achieved.
“The homebuyers who had booked their apartments with Supertech should not panic but immediately file their claim with IRP as required under the law," Piyush Singh, Partner of PSP Legal, which had filed several petitions before Delhi High Court and NCLT against Supertech, told Moneycontrol.
"The homebuyers should collectively also follow the company’s insolvency resolution process (CIRP) and participate in revival of the company by voting for a prospective resolution applicant,” he said.
Singh said that the central government should also step in and provide relief to homebuyers since the developer has several projects spread across various states and this move will impact thousands of homebuyers.
Supertech is not the first developer to go under insolvency. Jaypee Infratech went into the insolvency process in August 2017 after the NCLT admitted an application by an IDBI Bank-led consortium.
After a lengthy resolution process that saw many twists and turns Mumbai-based Suraksha group received the approval of financial creditors and homebuyers to take over the the company in June 2021, raising hopes for around 20,000 homebuyers of getting possession of their dream flats.
Supertech has been in the news lately after the Supreme Court on August 31, 2021 ordered the demolition of its 40-storey under-construction twin towers located in Noida for violation of building norms in "collusion with Noida officials".
The apex court had directed that the entire investment of 633 homebuyers who had booked flats in the twin towers be refunded with 12 percent interest from the time of the booking. About 248 homebuyers took an early refund, while 133 took flats in other Supertech projects.
The court also directed Supertech to pay the RWA (resident welfare association) of Emerald Court project Rs 2 crore for the harassment caused due to the construction of the twin towers, which would have blocked sunlight and fresh air to the existing residents of the housing project.
In February, the Noida Authority informed the Supreme Court that the demolition of the towers will be completed by May. The work on the demolition has started.