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The Supreme Court has rejected the plea to initiate insolvency proceedings against Supertech, a major real estate company, aimed at safeguarding home buyers from potential hardships and uncertainties. However, the court has determined that the Ecovillage 2 project in Greater Noida West will proceed under the Insolvency and Bankruptcy Code (IBC). Meanwhile, the other projects of Supertech will continue with the existing funds under the supervision of the Interim Resolution Professional (IRP), with the involvement of the current workers, employees, and management.
This decision comes after 104 buyers approached the Supreme Court seeking a resolution to their grievances. These homebuyers believed that a project-wise insolvency of Supertech would be the most beneficial solution for them.
In addition, the Supreme Court rejected the plea of Supertech homebuyers to prevent the real estate company's former promoters from disposing of their personal assets and disclosing information regarding their properties, assets, and bank accounts. Supertech had previously been declared bankrupt by the National Company Law Tribunal (NCLT) and had requested time to negotiate with banks. The 104 homebuyers sought protection of their fundamental rights against the large sum of money raised by Supertech, which was declared insolvent. It became evident that Supertech’ s primary focus was not on completing the projects but on selling assets to recover the amounts owed to them.
The bench, consisting of Justices Dinesh Maheshwari and Sanjay Kumar, denied the plea of Supertech's financial creditors to form a Committee of Creditors for the entire group, rather than just for the Ecovillage 2 project. The bench opted for a course of action that minimized the risk of injustice to the home buyers. It was understood that if every project was subjected to uncertainty, the ongoing projects would be adversely affected.
Therefore, the other projects will continue with the assistance of the Interim Resolution Professional (IRP), who will infuse funds under the guidance of the ex-management. This decision aims to ensure a smooth continuation of these projects for the benefit of the homebuyers. The creditors did not support the idea of project-wise insolvency proposed by the tribunal, as it lacked a resolution under the IBC.
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