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The Supreme Court on Wednesday directed real estate company Supertech to either refund the money it collected from the buyers of its twin towers Apex and Ceyane or give alternative flats to them. The Allahabad High Court had earlier ordered demolition of the two towers, which are part of the Emerald Court project in Noida.
The bench presided by Supreme Court Chief Justice R M Lodha asked the company to file an undertaking within a week to pay these amounts. The apex court said those who want the money back will get it by August 30 and the interest component of 14 per cent fixed by the high court shall be paid by October 30.
"They can’t wait indefinitely. They are entitled for their money. It is their hard earned money. They cannot keep moving courts in the ongoing litigation,” the bench said setting the deadline for the company to refund principal amount by end of August.
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The order clarified that while these terms will be complied with, the challenge to the main judgment of the Allahabad High Court order (Supertech has challenged the demolition order) will be decided in due course. The SC had earlier given an order of status quo on the matter, but restrained the company from selling any apartments in the two towers.
SC also turned down the plea of Supertech which contended that it is not in a position to pay back the money as the interest part has grown more than the principal.
“It is your obligation to give flats with clear title but the High Court directed you to demolish the buildings. They cannot remain in limbo. They cannot remain out of shelter. You cannot say no. Shelter is their ultimate ambition in life,” it said, adding, “They have not purchased litigation but flats. So you refund the money. Everything can’t be allowed to be flouted. You put yourself in the shoes of allottees.... It is a matter of survival for them,” said the bench, according to an agency copy.
“Their ambition has collapsed but you should not collapse. So you pay the principal amount now and we will give you time to pay the interest,” it said while granting the company two more months to the company to pay interest.
Supertech received 40-50 applications, out of which 80 per cent was for providing flats in alternative locations, the company’s chairman and managing director R K Arora told Business Standard.
The firm is planning to allot apartments in its other projects such as Cape Town, Eco City and Eco Village in Noida and the net outgo for refund would be Rs 5-7 crore, Arora added.
In a statement, Supertech said: “We will comply with the orders of the Supreme Court to return the money to all those allottees who exercised their option for refund. We had sought options from allottees whether to get refund of their money or to get alternative flats in other projects, to be exercised till April 30 this year. Accordingly, the applications received till the mentioned date will be disposed off as per the orders of the Supreme Court.”
The Allahabad High Court gave its order on April 11, following a petition by the residents’ welfare association alleging violation of building norms. The court had also asked Supertech to refund money to its buyers with 14 per cent compounded annual interest.
The Allahabad High Court judgment was passed while allowing a writ petition of the Emerald Court Owners Resident Welfare Association, which alleged that the approval and construction of the towers was “in complete violation of the UP Apartment Acts”. The petitioner claimed the Noida Authority had given permission to raise the height of the towers, which were supposed to have only 24 floors, without maintaining the mandatory distance of 16 metres from an adjoining building block, making it “unsafe, apart from blocking air and light”.
There are 857 apartments in the two towers, out of which 600 were sold out. Supertech maintains that all necessary approvals were taken for construction of the two towers.
The realty firm had cash reserves of Rs 542 crore, but liabilities of Rs 3,228 crore at the end of 2012-13, according to documents filed with the Union Ministry of Corporate Affairs. It grew to a company with revenues of Rs 1,874 crore in 2012-13, from Rs 218 crore in 2007-08, on the back of a real estate boom.
The company has about 40 ongoing projects worth Rs 14,000 crore across Gurgaon, Noida, Greater Noida, Uttarakhand and Bangalore. It has a little over 75 million sq ft under construction across the residential, commercial and hospitality segments. It also recently launched a university in Uttarakhand.
