Supertech's 9-year twin tower battle: How did it all build up?
The Supertech twin towers in Noida were razed to the ground at 2:30 pm on August 28, nine years after residents went to court alleging violation of norms. The demolition was ordered by the Supreme Court after it found the construction on the Emerald Court society premises in violation of norms.
The ‘Supertech Emerald Court’ housing society in Noida, in which the two towers were located, was proposed to be built in 2004. The Noida Authority allotted a plot of land measuring 48,263 sq m, which was a part of Plot No 4 situated in Sector 93A of Noida.
Changing plans
In 2005, the Noida Authority sanctioned the building plan for the construction of Emerald Court consisting of 14 towers, each with ground and nine floors (G+9). The construction commenced for these 14 towers.
Also watch: Noida’s Supertech’s twin towers razed to the ground
A year later, in June 2006, the total leased area allotted to the company was increased to 54,819.51 sq m. Under the rules, the floor area ratio was also increased from 1.5 to 2 for the new allottees after 2006. In December 2006, Noida Authority sanctioned the first revised plan for the Emerald Court under the NBR 2006, by which two additional floors were added, thereby bringing all of them to ground and 11 floors (G+11).
Also, additional buildings were also sanctioned — Tower 15, Tower 16 and a shopping complex. The area where the towers were built was to be made into a garden as per the original plan.
In 2012, the Noida authority reviewed the new plan, in which the height of the twin towers was fixed at 40 floors.
Following this, residents of Supertech Emerald Court society went to the Allahabad High Court in 2012 stating that the construction was illegal. The petitioners argued that the Supertech group violated norms to sell more flats and enhance their profit margins. Accordingly, in 2014, the court directed the authority to demolish the towers within four months (at its own expense) from the date the order was filed.
The battle in Supreme Court
The case then went to the Supreme Court. A number of petitions were submitted in the Supreme Court by homebuyers in support of and opposition to the Allahabad High Court’s ruling.
In August 2021, the Supreme Court ordered the demolition of the structures as their construction violated the minimum distance requirement. According to the court, the buildings were built illegally without taking the consent of the individual flat owners as required under the UP Apartment Act.
The apex court also said Supertech and the Noida Authority engaged in a “nefarious complicity”. It then ordered Supertech to demolish the buildings at its expense, under the guidance of the Noida Authority. The court gave Supertech three months to demolish the towers, but it took a year due to technical difficulties.
The buildings were to be demolished in May, which was later postponed to August 21. Recently, the Supreme Court had extended the deadline to August 28, with a band of 7 days till September 4 due to technical issues and weather conditions.
The Supreme Court has assured the buyers of the refund of the amount deposited with the builder. The court had directed that the entire amount of homebuyers to be refunded with 12 per cent interest from the time of the booking. It had also ordered that the Residents Welfare Association be paid Rs 2 crore for the harassment caused due to the construction of the twin towers.
The apex court also asked the Interim Resolution Professional (IRP) of the firm, facing insolvency proceedings, to deposit Rs 1 crore with the apex court registry as per a PTI report.
Supertech’s Rs 500 crore loss because of demolition
According to realty firm Supertech Ltd’s chairman R K Arora, the company incurred a loss of about Rs 500 crore, including construction and interest costs, because of the demolition of the towers.
“Our overall loss is around Rs 500 crore, taking into account the amount we have spent on land and construction cost, the charges paid to authorities for various approvals, interest paid to banks over the years and the 12 per cent interest paid back to buyers of these two towers, among other costs,” Arora told PTI on Sunday.
The current market value of over 900 apartments in the two towers was being estimated at over Rs 700 crore. Arora said the total built up area in these two towers was around 8 lakh square feet. “We constructed these towers as per the building plan approved by the Noida development authority,” he maintained.
Asked about the demolition cost, Arora said Supertech was paying Rs 17.5 crore to Edifice Engineering, which was tasked with safely pulling down the structures, including the premium amount for a Rs 100-crore insurance cover. In addition, there are several other costs associated with the demolition.
Supertech Ltd was formed in 1988 and has been involved various real estate projects in Delhi, Uttar Pradesh, Haryana and Uttarakhand and one residential project in Bengaluru.
Even before the twin towers were reduced to rubble, the company had issued a statement saying that it has delivered more than 70,000 flats and the demolition of these two towers with 952 flats will not affect the rest of the company’s projects.
“We have completed and given delivery of more than 70,000 units to homebuyers and are committed to give delivery to remaining homebuyers as per schedule time frame. We assure all our home buyers that the order of Supreme Court will not affect any other ongoing project and all other projects will continue,” it said.
Problems in raising funds
As per market figures, Supertech Group has around 20,000 apartments under construction in various projects in the National Capital Region (NCR). According to Arora, the Supertech Group is valued at over Rs 10,000 crore. However, the group is said to be facing a cash crunch as the real estate market is generally in trouble.
Arora, however, has assured in various media interviews that the construction of the remaining apartments would be finished in the next two years. He said the firm is trying to arrange funding to finish other projects soon.
Also read: Demolition of twin towers lesson for all stakeholders, say industry experts
He claims that only one project of Supertech Group has gone into the insolvency process — Ecovillage-2, located in Noida Extension. According to Arora, except for 3009 flats of this project, no other project of the company is under dispute.
But, from 2018 to 2022, the company’s disputed project has seen a rise of 1 per cent. In such a situation, any negative windfall arising from twin tower demolition will make it much more difficult for the company to raise funds for the remaining projects
