NBCC To Lead Completion Of Supertech's Stalled Projects, Securing Homebuyers' Rights

In a landmark judgment, the National Company Law Appellate Tribunal (NCLAT) Delhi bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) has approved NBCC (India) Ltd.'s proposal to complete 16 incomplete projects of Supertech Limited. NBCC will act as the Project Management Consultant to ensure timely and quality completion of these projects. The judgment advocates for transparency and accountability in the real estate industry and protection of the rights of homebuyers, lenders, and public funds. Background Facts: M/s. Supertech Limited (“Corporate Debtor”) is a real-estate Company engaged in construction of various housing Projects in Noida, Greater Noida, and other cities of the country. Union Bank of India (“Financial Creditor”) had extended financial facilities to the Corporate Debtor for Project Eco Village-II. There being default committed by the Corporate Debtor in repayment of financial facilities, Section 7 Application was filed and admitted. An interim order was passed on 12.04.2022, directing the IRP not to constitute the Committee of Creditors (“CoC”). The order was modified on 10.06.2022, permitting CoC to be constituted with regard to Project Eco Village-II only; other Projects were to continue under the supervision of Interim Resolution Professional (“IRP”). The Supreme Court passed an order on 11.05.2023 which allowed operation of order dated 10.06.2022. The Tribunal directed Project wise resolution on 31.05.2024. On 15.07.2024, NBCC showed interest in the Projects of Corporate Debtor. On 19.09.2024, NBCC filed an application to undertake the Projects, which was allowed. On 16.10.2024, the Tribunal directed the implementation of the Master Agreement to complete the Project. In an application filed by NBCC Ltd., the Supreme Court on 01.10.2024 directed that the pendency of appeals would not hinder NCLAT's examination of NBCC's proposal for 17 ongoing Projects of the Corporate Debtor. The order passed by the NCLT, New Delhi dated 25.03.2022 admitting Section 7 Application filed by Union Bank of India against the Corporate Debtor - M/s. Supertech Limited was challenged. Submissions: Counsel for Yamuna Expressway, Noida, and Greater Noida opposed the application filed by NBCC on two main grounds. It was submitted that these authorities have provided land to Corporate Debtors, and there are liabilities on the Corporate Debtors towards statutory authorities. The NBCC Proposal does not address the repayment of these dues in the Terms of Reference. Without including a repayment plan, the Proposal is neither acceptable nor feasible. NBCC's request for a waiver of statutory compliances or financial concessions cannot be accepted, as these Authorities are bound to follow the UP Industrial Development Act, 1976, and related regulations. It was further submitted that the statutory Authorities must be included in the proposed Court Committee to safeguard public interest. Counsel for Homebuyers expressed support for the NBCC Proposal to complete the Projects, bringing attention to the long-standing delays in the delivery of their homes. It was submitted that Homebuyers should not be asked to pay any additional amounts beyond what was agreed to in the Builder Buyers Agreements. One group of Homebuyers expressed concerns about the NBCC Proposal. Cape Town Association of Apartment Owners highlighted deficiencies in the Status Report filed by IRP related to safety issues, water, and electricity concerns. Eco Village-II Welfare Association proposed the formation of a Court Committee and a project-specific bank account. It was further submitted that the liability period should be extended to 5 years, rather than 2 years mentioned in NBCC's Terms of Reference. Allottees of Eco Village-I objected to lack of a clear timeline for completion. It was argued that NBCC should be held accountable for adhering to RERA requirements. Supertech North Eye, Supertech Group Buyers Association submitted that NBCC's proposal lacked clarity regarding finance sources, timelines, and escalation costs. The Counsel advocated for the establishment of a project-wise committee and the fulfillment of financial obligations towards lenders and authorities. 26,475 homebuyers submitted support for the NBCC proposal. They insisted that a forensic audit should be conducted and a project-specific committee be formed to ensure that no cost escalation burden is placed on homebuyers. Counsel for Homebuyers submitted that Homebuyers are not much concerned as to who constructs the project, but they are concerned with the timeline under which the construction is to be completed and the houses delivered to them. Homebuyers should not be asked to pay any extra amount apart from the amount agreed upon in the Builder Buyers Agreement. Homebuyers also pressed for their entitlement to delay compensation...

NBCC To Lead Completion Of Supertech's Stalled Projects, Securing Homebuyers' Rights

Tazeen Ahmed

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