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The National Company Law Tribunal (NCLT) has accepted an insolvency petition against Supertech ORB, a developer of luxury residential properties in Delhi-NCR. The petition was filed by Assets Care and Reconstruction Company (ACRE), an asset reconstruction company supported by Ares SSG Capital. The insolvency admission could potentially lead to delays in homebuyers obtaining possession of their upscale residences in Noida. Furthermore, Supertech's promoter, R K Arora, is currently in jail related to money laundering and allegations of cheating homebuyers, further complicating the situation.
Supertech ORB Project Pvt Ltd had secured a loan of Rs 349 crore from Altico Capital for its North Eye Cape Town in Noida, which has four ultra-luxury high-rise towers. Following the closure of Altico Capital's operations in India in 2021, this loan was transferred to ACRE.
In September 2022, a settlement agreement had been signed by the borrower to settle a loan of Rs 353 crore. However, ACRE alleged that Supertech had failed to comply with the terms of the settlement agreement. Instead, they had attempted to forge documents to falsely indicate compliance with the agreed-upon terms. The lender also discovered that the corporate debtor had been diverting funds from other units that were already mortgaged to ACRE.
Consequently, the lender terminated the settlement agreement and demanded the repayment of Rs 482 crore, comprising Rs 225 crore in principal loans, Rs 202 crore in interest, and Rs 55 crore in default interest, by March 31, 2023. Additionally, ACRE had filed a claim with the Resolution Professional (RP) of Supertech Ltd, which had provided guarantees for Supertech ORB's loans.
Supertech's legal counsel argued that a Supreme Court decision on May 5, 2023, called for a project-specific resolution rather than admitting the entire company for corporate insolvency.
However, the NCLT dismissed this argument, stating that the lenders for both projects were distinct, and ACRE had the right to initiate the Corporate Insolvency Resolution Process (CIRP) against the principal borrower.
Notably, Supertech Ltd's Eco Village project had already been admitted for corporate insolvency in the previous year, following a petition by Union Bank of India and India Bulls ARC. This was due to the demolition of twin towers at the Eco Village project, as they were declared illegal by a Supreme Court ruling.
With multiple insolvency cases and legal disputes, Supertech finds itself in a precarious position, raising concerns over the fate of its construction projects and the homeowners' investments.
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