Home-buyers in the lurch after real estate firm Supertech faces insolvency

Real estate firm Supertech Ltd. has been declared bankrupt by the National Company Law Tribunal (NCLT) after the non-payment of over ₹ 432 crore dues, a move that will affect more than 25,000 home buyers in the Delhi-NCR region.

Ruling on a petition filed by the Union Bank of India, the NCLT said: “There has been a default in payment of the financial debt.”

The court also appointed Hitesh Goyal as the Interim Resolution Professional (IRP) superseding the board of Supertech Ltd., under the Insolvency and Bankruptcy Code (IBC).

A two-member NCLT bench comprising PSN Prasad and Rahul Bhatnagar said that the documents submitted by the financial creditor Union Bank of India as well as the corporate debtor Supertech had “substantiated” the former’s claim that there was a debt on which the builder had defaulted.

Also read: Supertech to start repaying Noida twin tower homebuyers from Jan 18

“In light of the above discussion, after giving careful consideration to the entire matter, hearing arguments of the parties and upon the appreciation of the documents placed on record to substantiate the claim, this tribunal admits this petition and initiates CIRP (Corporate Insolvency Resolution Process) on the corporate debtor with immediate effect,” the NCLT said.

Apart from this, Supertech is also barred from “transferring, encumbering, alienating, or disposing of any assets”, according to NCLT.

The default includes the loan given by the Union Bank of India to the Eco Village II project at Greater Noida (West) in Uttar Pradesh, which was being developed at a price of ₹1,106.45 crore.

In 2013, Supertech Ltd. had approached various financial institutions to avail a credit facility of ₹350 crore from a consortium of banks, and out of them, Union Bank of India had given ₹150 crore. A loan agreement was executed between the banks and Supertech on December 30, 2013, but the company has repeatedly failed to make payments on time since then.

Supertech Group said that it would challenge the order before the National Company Law Appellate Tribunal (NCLAT).

“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,” the company said in a statement.

Supertech Group’s Managing Director Mohit Arora told PTI that the real estate company has 38,041 customers and out of them, homes have been delivered to 27,111 people. As many as 10,930 homes are yet to be delivered and among them, over 70 per cent of construction is complete for over 8,000 homes.

“There are around 11-12 housing projects in the Supertech Ltd., against which insolvency proceedings have been initiated. Around 90 per cent of these projects are completed,” Arora said. “The debt of Supertech Ltd is around ₹ 1,200 crore, including nearly ₹ 150 crore loans from Union Bank of India,” he added.

According to Arora, three-four other companies in the group are developing many projects across Delhi-NCR, including the luxury project Supernova.

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.

Also read: SC orders demolition of Supertech’s Noida twin towers in two weeks

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 company in June 2021, raising hopes for around 20,000 homebuyers of getting possession of their dream flats.

On August 31 last year, the Supreme Court had ordered the demolition of Supertech Ltd’s twin 40-storeyed towers, which are part of the under-construction Emerald Court project in Noida for violation of building norms in “collusion with Noida officials”.

(With inputs from Agencies)