Supertech Declared Bankruptcy, potentially affecting 25,000 home buyers.
Under the Insolvency and Bankruptcy Code, the NCLT’s Delhi bench has also designated Hitesh Goel as the insolvency resolution professional (IRP) in this case (IBC). PSP Legal, which has filed multiple petitions against Supertech, advises homebuyers not to worry and to register their claim with IRP as soon as possible.
The Union Bank of India approached the Tribunal on behalf of the lenders, requesting that the corporation be declared insolvent.
Supertech Limited is India’s premier real estate developer; it was created 32 years ago in the National Capital Region and has steadily grown since then.
Supertech, a Realty major, declares Bankruptcy; the NCLT bench appoints an IRP.
After the National Company Law Tribunal’s Delhi bench approved a petition filed by the Union Bank of India for non-payment of dues, Supertech, a developer based in Delhi-NCR with projects in Noida, Greater Noida, Gurugram, and Ghaziabad, declared insolvency on March 25.
The Eradi Committee suggested that a National Company Law Tribunal be established. NCLT was scheduled to be introduced into the Indian legal system in 2002 under the Companies Act, 1956; however, it was only notified in 2013 after a ten-year legal fight over its constitutional validity.
NCLT functions are similar to a regular court of law in the country, with the responsibility of determining the facts of each case fairly and impartially, making decisions based on natural justice principles, and issuing orders based on those decisions.
The NCLT’s orders could help settle a crisis, correct a corporate wrong, impose penalties and costs, and change the rights, obligations, duties, or privileges of the parties involved. The Tribunal is not constrained by any of the stringent rules that govern the appraisal of evidence or procedural law.
This order might affect over 25,000 homeowners who have been waiting for years for the developer to deliver their homes.
The NCLT appointed Hitesh Goel as Supertech’s insolvency resolution professional (IRP) under the Insolvency and Bankruptcy Code (IBC). The Tribunal reserved its ruling in the case on March 17, 2022, after the bank rejected Supertech’s one-time settlement offering and heard arguments.
The status of Supertech’s debts to lenders is unclear. We are awaiting a copy of the written order. Supertech has responded to the demand by stating that it will file an appeal with the NCLAT.
“In the subject of the National Company Law Tribunal (NCLT) appointing an IRP in one of the Supertech Group Companies, management of the Company announced that the Company will appeal the ruling to the NCLAT because the problem involves a financial creditor. In the interests of homebuyers, they prioritised the building and delivery of projects over the repayment of bank debts that could pay after they completed the task.
There is no risk of loss to any party or financial creditor because all of the Company’s projects are financially sustainable. According to the Company’s statement, the order will have no impact on the operations of any other Supertech Group company,” according to Company.
The NCLT order, according to the business, will have no influence on the Company’s ongoing projects or operations, and “we are dedicated to delivering units to allottees.” We have a solid track record of delivering over 40000 flats in the last seven years. We will continue to do so under our “Mission Completion – 2022,” under which we have planned to deliver 7000 units by December 2022.”
There is a suspension on all ongoing civil, consumer, and RERA cases, including executions, until a corporation is admitted to the corporate bankruptcy resolution procedure.
“Homebuyers who had booked apartments with Supertech should not worry, but should register a claim with IRP as soon as possible,” says the statement “Piyush Singh is a partner at PSP Legal, which has filed many applications against Supertech in the Delhi High Court and the NCLT.
“The homebuyers should all follow the company’s insolvency resolution process (CIRP) and vote for a potential resolution applicant to participate in the company’s revival,” he stated.
Because the developer has many projects in various states and this decision will affect thousands of purchasers, Singh believes the federal government should step in and provide relief to them.
Supertech is far from the only developer to declare Bankruptcy. After the NCLT accepted an application by an IDBI Bank-led consortium in August 2017, Jaypee Infratech entered the insolvency procedure.
The Mumbai-based Suraksha group gained consent from financial creditors and homeowners to take over the Company in June 2021, raising expectations for approximately 20,000 homebuyers to get ownership of their dream flats after a lengthy resolution process that saw many twists and turns.
Supertech has recently made headlines as the Supreme Court ordered the demolition of its 40-story under-construction twin buildings in Noida on August 31, 2021, citing violations of building codes and “collusion with Noida officials.”
The Supreme Court ordered that the entire investment of 633 homeowners who had reserved flats in the twin towers be repaid, plus interest, from the time of booking. Approximately 248 homeowners received an early refund, while they offered 133 were apartments in other Supertech developments.
The court also ordered Supertech to pay Rs 2 crore to the Emerald Court project’s RWA (resident welfare association) for the harassment caused by the twin towers’ construction, which would have obstructed sunlight and fresh air to the project’s current tenants.
In February, the Noida Authority informed the Supreme Court that the towers would be demolished by May. The destruction of the building has begun.
About Supertech limited
In the present worldwide context, the organisation has established new architectural finesse trends that have reached new heights of quality. Supertech, founded under the dynamic leadership of Mr R. K. Arora, has resulted in the production of numerous landmark projects. The Company’s leaders and talented workers have worked hard to establish out-of-the-box ideas to propel the real estate industry forward. Supertech was the first in India to introduce the concept of mixed-use development and to build high-rise structures in the north.
Supertech has a strong presence in Uttarakhand, Uttar Pradesh, and Haryana in the north, and it is now building a project in Bengaluru in the south.
The firm is working on projects in various real estate sectors, including residential, townships, commercial, retail, office space, and hospitality.
Supertech has grown in terms of the number of projects it has completed and the engineering skills, unique design, and architectural refinement it has introduced to the Indian real estate market.
Supertech is the first Indian real estate developer to use precast technology, making construction a step forward.
Supertech has a significant presence in the northern states of Uttrakhand, Uttar Pradesh, and Haryana.
Compared to the construction duration of a brick house, technology allows for hassle-free construction to be completed at any time of year, saving up to 64% of the time. It also pioneered the jump form technique, which speeds up the construction of any high-rise structure. North Eye and Supernova, the Company’s tallest residential and mixed-use complexes in North India, are now under construction in Noida, Uttar Pradesh.
On June 1, 2016, the Central Government established the National Company Law Tribunal (NCLT) under section 408 of the Companies Act, 2013. (18 of 2013).
The Ministry of Corporate Affairs has established eleven Benches in the first phase, including one Principal Bench in New Delhi and ten Benches in New Delhi, Ahmadabad, Allahabad, Bengaluru, Chandigarh Chennai, Guwahati, Hyderabad, Kolkata, and Mumbai. The President, 16 Judicial Members, and 09 Technical Members led these Benches, which met in various locations. More members have joined, and benches have been established in Cuttack, Jaipur, Kochi, Amravati, and Indore.
A quasi-judicial body in India, The National Company Law Tribunal is the one that hears matters involving Indian businesses. The Tribunal was established on June 1, 2016, by the Indian government under the Companies Act 2013 and is based on the V. Balakrishna Eradi committee’s recommendations on insolvency and Company winding up law.
The National Company Law Tribunal will hear all cases under the Companies Act, including arbitration, compromise, agreements, reconstructions, and Company wounds.
Under the Insolvency and Bankruptcy Code, 2016, the National Company Law Tribunal (NCLT) is the adjudicating authority for the insolvency resolution process of businesses and limited liability partnerships. A judicial member, retired or sitting High Court Judge, and a technical member who must be from the Indian Corporate Law Service, ICLS Cadre make up the NCLT bench.
No criminal court shall have jurisdiction to hear any suit or proceeding relating to any matter that the Tribunal or the Appellate Tribunal is empowered to decide by or under this Act or any other law currently in force. According to this Act, no action taken by the Tribunal or Appellate Tribunal in the exercise of any power given by or under this Act or any other law is subject to judicial review. No injunction will be granted by any court or other body about this case.
Insolvency in the real estate industry
Jaypee Infratech had already filed for Bankruptcy in August 2017 after an IDBI Bank-led consortium filed a petition.
Suraksha Group defeated the government’s construction arm National Building Construction Corporation (NBCC) (India) Ltd, by a razor-thin margin to purchase Jaypee Infratech under IBC after a three-year resolution process.
Under the resolution plan, around 20,000 homeowners are expected to acquire possession of their ideal apartments.
Under the IBC process, Bengaluru-based Prestige Estates Projects paid the lenders of Mumbai’s stressed Ariisto Developers Pvt Ltd an upfront payment of Rs 370 crore ($50 million) in June last year.
Meanwhile, Amrapali Group, another strained real estate developer, was recently in the news after its homebuyers raised concerns in February about the building quality of housing projects being finished by NBCC as required by the Supreme Court.