Noida-based builder Supertech faces second major setback in the last one year; details here

New Delhi: Supertech Ltd 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 construction is complete with respect to over 8,000 homes, according to Supertech Group Managing Director Mohit Arora.

The tribunal has also directed the IRP to make a public announcement in this regard and declared a moratorium against the company as per the provision of the Insolvency & Bankruptcy Code.

Moratorium will continue till a resolution plan is approved and during that period no new cases or claims can be filed against the company in any court of law, tribunal, arbitration panel or any other authority.

Apart from this, Supertech is also barred from transferring, encumbering, alienating, or disposing of any assets.

This is the second major setback for Noida-based developers in the last one year. 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.

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

"In the matter of appointment of IRP in one of the Supertech Group companies by the NCLT, management of the company stated that the company will be approaching NCLAT in an appeal against the order," Supertech Group said in a statement.

However, it also added the NCLT order will not affect operations of other companies of the Supertech Group.

The NCLT order will not impact the construction at all ongoing projects or operation of the company and "we are committed to giving delivery of units to allottees," it said.

When contacted, Arora said, "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."

The projects that will be impacted include Eco Village I, II and III in Greater Noida (West), known as Noida Extension, as well as the Emerald Court project, which houses the twin towers.

The debt of Supertech Ltd is around Rs 1,200 crore, including nearly Rs 150 crore loans from Union Bank of India, he added.

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

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

In 2013, Supertech Ltd had approached various financial institutions to avail a credit facility of Rs 350 crore from a consortium of banks, and out of them, Union Bank of India, the lead bank, had an exposure of Rs 150 crore.

A loan agreement was executed between the banks and Supertech on December 30, 2013.

Later, the loan account of banks which was maintained by Supertech in respect of the credit line became highly irregular with repeated defaults in payment of principal and interest.

Finally, a notice was sent on April 24, 2019 and Supertech again failed to pay and Union Bank of India moved the NCLT.

Supertech had opposed the plea contending that it was filed by the lenders with the authority and as per the clauses of their inter credit agreement, lenders are restricted to initiate any action of winding up, liquidation, bankruptcy, insolvency or dissolution of the borrower.

Moreover, NPA classification of their account was contrary to the guidelines issued by RBI, as per the realty firm contended.

Rejecting the argument, the NCLT said Supertech had submitted a one time settlement proposal which was not accepted by the financial creditor.

"The counsel for the corporate debtor has therefore admitted the debt and default," it said.