NCLT orders proceeding against Supernova developer Supertech Realtors

The National Company Law Tribunal (NCLT) has ordered initiating an insolvency proceeding against Supertech Realtors, which is developing a residential apartment, office, retail and luxury hotel at its Supernova project.

A two-member Delhi bench of NCLT admitted the insolvency plea filed by the Bank of Maharashtra over a default of Rs 168.04 crore and appointed Anju Agarwal as interim resolution professional (IRP), suspending the board of Supertech Realtors, a step-down subsidiary of Supertech.

Supertech is also facing a Corporate Insolvency Resolution Process (CIRP).

Supertech Realtors is developing Supernova project at a cost of Rs 2,326.14 crore on a land admeasuring 70,002 square metres at Sector 94, Noida.

As per the plans, Supernova project will have 80 floors and will be the tallest building in Delhi-NCR at a height of 300 metres.

For the project, Supertech Realtors approached a consortium of lenders led by Union Bank of India seeking a financial assistance of Rs 7,35.58 crore. Out of this, it had also requested for a credit facility of Rs 150 crore, which was granted by Bank of Maharashtra.

In December 2012, a term loan of Rs 150 crore was granted. The term loan was repayable in quarterly installments in the consolidated door-to-door tenor for 10 years and 4 months by March 2023.

However, Supertech Realtors failed to maintain financial discipline and defaulted in properly maintaining the said accounts in addition to committing other breaches and violations of the credit limit, leading to accumulation of huge outstanding.

This was also acknowledged by the realty firm and despite repeated reminders and requests, no further payments of the dues were made, the corporate debtor (Bank of Maharashtra) said. Following this, it approached NCLT.

The realty firm opposed the plea on technical grounds and submitted that the date of default in the said petition varies and is in contradiction to each other.

It alleged that the non-performing asset as per the creditor is reckoned to be September 28, 2018. Thereby the said application is not only defective but also barred by limitation and liable to be dismissed.

Further, it submitted that it was a victim of the economic slowdown and financial crunches that crippled the real estate industry. Also, due to farmers' and land-owners' objections and additional compensations, the period from 2010 to 2015 was completely unfavourable and disturbing.

However, the NCLT said on a perusal of documents, it is satisfied that the Bank of Maharashtra comes within the definition of financial creditor and the loan was disbursed to Supertech Realtors and there exists a debt and a default.

"Thus, it is clear that when a default takes place i.e., the debt becomes due and is not paid, the Insolvency Resolution Process shall begin against the corporate debtor... we are satisfied that the present application is complete in all respects... the present company application stands admitted and the CIRP is hereby initiated against Supertech Realtors," the tribunal said.

The NCLT also put a moratorium on all transactions related to Supertech Realtors, as per the provision of the Insolvency & Bankruptcy Code.

"We direct that public announcement shall be made by the Interim Resolution Professional immediately" about the admission of the insolvency application, said the 34-page NCLT order.