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The Supreme Court has put a hold on the National Company Law Appellate Tribunal's (NCLAT) directive appointing the state-owned NBCC as the project management consultant to complete 16 stalled housing projects of Supertech Ltd, valued at approximately INR 9,500 crore. This decision impacts over 42,000 homebuyers who have been awaiting possession of their homes for years. The court intends to examine whether the NCLAT adhered to the Insolvency and Bankruptcy Code (IBC) while appointing NBCC. All stakeholders, including corporate guarantors, Supertech promoter RK Arora, and the Yamuna Expressway Industrial Development Authority (YEIDA), have been directed to submit alternative proposals by late March. The stay returns management control of Supertech to its interim resolution professional (IRP), with the resolution professional instructed to proceed according to legal protocols.
The Supreme Court has stayed the National Company Law Appellate Tribunal's (NCLAT) order, which had appointed the state-owned National Buildings Construction Corporation (NBCC) as the project management consultant to complete 16 stalled housing projects of debt-ridden real estate firm Supertech Ltd. These projects, spanning Uttar Pradesh, Uttarakhand, Haryana, and Karnataka, were estimated to cost approximately INR 9,500 crore and have left over 42,000 homebuyers in prolonged uncertainty regarding the possession of their homes. Advertisement
The bench has issued notices to the involved parties and has decided to scrutinise whether the NCLAT's decision complied with the procedures outlined under the Insolvency and Bankruptcy Code (IBC). The NCLAT had earlier directed the NBCC to begin awarding contracts before the end of March and begin construction in early May. NBCC planned the construction in three phases, with projects in Noida, Greater Noida, Meerut, Gurugram, Dehradun, and Bengaluru scheduled for completion in successive phases.
Supertech promoter RK Arora and secured creditors, including banks, raised objections to NBCC's plan, arguing that it lacked a structured approach to debt repayment. YEIDA also opposed the NCLAT's ruling, stating that it did not account for outstanding dues to Noida, Greater Noida, and Yamuna Industrial authorities.
The Supreme Court has instructed stakeholders, including corporate guarantors, Supertech promoter RK Arora, and YEIDA, to present alternative proposals for project completion by late March. Meanwhile, the court has reaffirmed that all submitted proposals must focus solely on ensuring project completion rather than addressing repayment of dues. The resolution professional has been directed to continue its functions in accordance with legal procedures.
The insolvency crisis of Supertech Ltd began in 2021 when the Union Bank of India initiated proceedings under Section 7 of the Insolvency and Bankruptcy Code, citing a debt claim of INR 431 crore as of early 2021, along with accrued interest. In mid-2023, the Supreme Court allowed a "project-wise resolution" approach for Supertech, enabling construction under the supervision of an interim resolution professional (IRP).
The Supreme Court's decision to stay the NCLAT's directive has added a new dimension to the ongoing insolvency proceedings of Supertech Ltd. As the legal proceedings continue, the final decision will be pivotal in determining the fate of these long-delayed housing projects.
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