SC rejects request to initiate insolvency proceedings for the whole Supertech group.

NEW DELHI: The Supreme Court ordered on Thursday in its interim order that only one of Real estate giant Supertech’s projects—Eco Village 2 in Greater Noida West—would be dealt with under the Insolvency and Bankruptcy Code (IBC), noting that doing so would “cause immense hardship” and “uncertainty” to homebuyers.

A bench of Justices Dinesh Maheshwari and Sanjay Kumar rejected the request of Supertech’s financial creditors to form a Committee of Creditors for the entire group rather than just one project, as required by the National Company Law Appellate Tribunal (NCLAT), for the relief of thousands of homebuyers who reserved flats in other projects of the Supertech.

“If at this time, as argued by the appellants, a CoC is ordered to be established for the corporate debtor as a whole in defiance of the Appellate Tribunal’s instructions, it is likely to have an impact on those ongoing projects, cause serious difficulty for the homebuyers, and cast every project in doubt.

On the other hand, as was previously mentioned, the IRP is continuing other projects, and efforts are being made to inject funding with the active support of the former management, but without giving the former management any further rights. The bench stated, “In our opinion, passing any interim order of the constitution of CoC in reference to the corporate debtor as a whole is likely to entail greater hardship and may cause irreparable injury to the property buyers.

The top court affirmed the tribunal’s approach, according to which all other projects of the corporate debtor, with the exception of Eco Village-II, are to be maintained as ongoing projects and all other projects are to be completed with the aid of the former management, its staff, and laborers while being overseen by the IRP. It stated that for the time being, the arrangement shouldn’t be disturbed.

Union Bank of India and India Bulls Asset and Reconstruction Company Ltd, two of the creditors, argued that the appeal panel lacked authority under the IBC to permit project-wise CIRP and to approve a resolution plan put up by the promoter without providing the CoC a chance to comment. Additionally, it was argued that the IBC did not have an idea of project-specific resolution.

It stated that the appeal tribunal’s order will continue to be in effect subject to the court’s final rulings, and it also directed that no action related to the Eco Village II project should be taken beyond voting on the resolution plan without specific orders from it.