NCLT orders insolvency proceedings against Supertech

NEW DELHI: Real estate developer major,

Supertech

Limited, has been declared insolvent by NCLT, Delhi, for defaulting in repaying the Rs 431.92 crore loan given by Union Bank of India.


On Friday, NCLT, Delhi bench of Members PSN Prasad (Judicial) and Rahul Bhatnagar (Technical) has admitted a petition filed by Union Bank of India and appointed an Insolvency Resolution Professional (IRP) Hitesh Goel, for Supertech Ltd. The company took the loan to complete the Eco Village II project in Greater Noida.

The judgment is likely to affect thousands of home buyers as the order would lead to a change in the company's management. For all practical purposes, IRP Hitesh Goel will be the chief executive officer (CEO).

NCLT, so far, is not proven to be very successful in resolving the insolvency of big real estate groups like Jaypee Infra. Even after
more than three years of appointing an IRP, the company is begging for a resolution.

CMD of Supertech Ltd R K Arora said that the company would move to the appellate tribunal against the order. However, he said that the order would not affect the home buyers in the projects like Supernova, ORB, Golf Country, Hues, Azalia, Esquare, Valley, and Basera, as they are under a different company.

The order was reserved on March 17, 2022, when the bank rejected the one-time settlement offer given by Supertech Ltd. Due to the NCLT order, there will be a moratorium against the company till the completion of the resolution process.

The moratorium will apply to all pending civil, consumer, RERA cases, including executions.

However, Aditya Parolia, a senior lawyer and Partner PSP Legal, said that the Insolvency Resolution Process is meant to revive a company and not the company's death knell.

The company will continue to operate as a going concern under the appointed IRP and will continue to discharge all the functions with available resources.

Therefore, the home buyers and other creditors should not panic but should try to secure one's rights by filing their claim with IRP as required by the law. IRP will announce the start date and website for the purpose.

Filing the claim would enable them to ascertain their claim in the company and be a part of the Committee of Creditors (COC), which will take all the crucial decisions for the company.

Supertech, in a statement, said that as all the projects of the company are financially viable, that means each project had enough receivables from the sold inventories to complete the construction, there is no chance of loss to any party or financial creditor.

Arora said that the company defaulted as it gave preference to spend receivables to complete the construction over the repayment of loans in the interest of homebuyers.

Under RERA rules, a company has to spend at least 70% of the receivables on the completion of the project and the rest 30% on the
repayment of loans and meeting the other liabilities.

Supertech said that the company had delivered more than 40,000 flats/units in seven years. Arora said that the company would deliver over 7,000 units by December 2022.


Stay informed with the latest Business News on Times of India. Explore updates on International Business, gain insights with Financial Literacy tips, and make use of Financial Calculators. Don’t forget to check the list of Bank Holidays in 2025, including Bank Holidays in January.


Ready to Master Stock Valuation? ET’s Workshop is just around the corner!