NCLT admits Supertech ORB to insolvency resolution process

Supertech ORB

The National Company Law Tribunal (NCLT) at Prayagraj admitted Supertech ORB, a project developed by the debt ridden Supertech group to insolvency on October 13.

The order was passed in a plea filed by Assets Care and Reconstruction Enterprises Limited (ACRE) for defaulting in repayment of a debt of Rs. 482 crore, which includes both principle and interest. Shailendra Ajmera, the resolution professional of Go First has been appointed as Supretech's interim resolution professional.

ACRE had argued that Altico Capital Ltd, whose loans it had acquired, had sanctioned a loan of Rs 349 crore to Supertech ORB in 2017. The company, however, defaulted in making repayments as per the schedule contemplated in the loan agreement, which led to ACRE issuing a acceleration and enforcement notice in September 202. Subsequently, the parties arrived at a settlement and executed a settlement agreement, according to which a few units of Project Cape Town were to be transferred to ACRE by December 2021. However since Supertech ORB did not do so, they terminated the agreement in April 2022.

Supretech ORB had contended that ACRE was not revealing the entire set of facts and noted that they are engaged in the second round of settlement talks and are hopeful about a positive outcome. Furthermore, it was contended that ACRE is pursuing this litigation with the sole purpose of coercing Supertech ORB to agree to their terms in the settlement process.

The tribunal however noted that the amount of debt has not been disputed anywhere and said "if there is a debt and default in repayment of debt and application filed by the Applicant/Financial Creditor is complete in all respect, the application for initiating corporate insolvency process  is to be admitted."

According to NCLT, there is a debt and and a clear default in payment
of debt amount as per the loan agreement as well as the settlement agreement. Thus Supertech ORB has to be admitted to Corporate Insolvency Resolution Process (CIRP).

Supertech and CIRP:

In 2022, Supertech limited was admitted to CIRP by the NCLT at Delhi. However, the NCLAT modified the order exempting all projects other than Project Eco Village II. The appellate tribunal directed the IRP of Eco Village- II to ensure that the construction is completed.

In May 2023, the SC gave a go ahead to this order.

Moneycontrol has learned that government is likely to amend the Insolvency and Bankruptcy Code (IBC), 2016, to enable project-wise resolution of real-estate companies. Discussions on the amendment are currently on with the law ministry.