Homebuyer Manish Singhal booked an apartment in a Supertech Limited project in 2012, hoping the unit would be delivered by 2016. The superstructure was ready by 2017, but there has been no construction on the ground since. He has paid more than Rs 60 lakh. Last year, he filed a case against the company with the Real Estate Regulatory Authority (RERA).
Does he see a ray of hope now that Supertech has gone into insolvency after the Delhi bench of the National Company Law Tribunal (NCLT) on March 25 admitted a petition filed by Union Bank of India for non-payment of dues worth Rs 431 crore? Not really.
"Of the more than Rs 60 lakh that I have paid the builder till now and Rs 30 lakh that I have spent servicing my home loan, I can at best look forward to one-third of the amount through the insolvency process. However, if the IRP gets these units completed by a third-party developer, I may still have some hope of finally getting a home as the superstructure is already 60% ready, "Singhal told Moneycontrol. IRP is short for Insolvency Resolution Professional.
Another buyer is not sure if the initiation of insolvency proceedings against Supertech is a good or bad sign. "I have been waiting for delivery of my unit for almost 10 years, two years with RERA, and am not sure how long the wait will be in NCLT. This buyer said, "I am only concerned with one thing: I should get a roof over my head."
There are hundreds of buyers who have cases pending against Supertech. Buyers are not sure about the next course of action.
Under the Insolvency and Bankruptcy Code, once a company is admitted into the resolution process, a moratorium on all pending civil, consumer, and RERA cases takes effect until the process's completion.
Legal experts say that if homebuyers want, they can file claims with the IRP appointed by the NCLT on the matter. "For now, all buyers should file their claim forms before the IRP. Once that exercise is done, they should raise their concerns with the COC and with the IRP as well. It is imperative that the homebuyers act together towards completion of the projects, "said Aditya Parolia, a lawyer who has taken up several cases on behalf of Supertech homebuyers.
Homebuyers should file a copy of the RERA order while submitting their claim with the IRP.
"The most important thing homebuyers should do is file the order issued by RERA or any other court if it has been finally decided along with the calculation sheet. The documents that they need to file are the CA form, a copy of the Provisional Allotment Letter/Allotment Letter if any, a copy of the Builder-Buyer Agreement executed if any, a Statement of Account or all the receipts of the payments as provided by the builder; Copy of application PAN card(s); Bank Account Details in which you want money to be transferred; Any order from the court received, "advises Anshul Gupta of ANG Partners, Advocates and Solicitors."
How do the numbers stack up?
At the Uttar Pradesh Real Estate Regulatory Authority (UPRERA), as many as 27 cases have been registered against Supertech. These translate to 2,538 complaints, of which 1,790 have been decided by the authority. UPRERA has issued 133 orders of refund; 1,347 cases pertain to possession of flats. In some cases, because possession was not possible, the order was converted to one for a refund, officials at the authority told Moneycontrol.
"So far we have issued 260 recovery certificates," said Abrar Ahmed, principal adviser at UPRERA, adding that Supertech had complied with 94, or 36% of them.
"The value of the recovery certificates was Rs 108 crore, of which Rs 36 crore has been settled with the builder," he said.
Recovery certificates are orders issued by RERA asking builders to clear the dues of buyers in case of failure to deliver projects within the stipulated deadline.
Homebuyers in Eco Village Phase 2 filed 136 complaints, of which 80 have been decided so far, UPRERA officials said.
Refund orders have been issued in two cases, and orders of possession in 59 cases. These are largely completed units, and buyers who wanted possession filed the cases to make sure that the remaining work on them was speeded up.
The maximum number of complaints filed so far against the builder are from buyers in Eco Village Phase 3. A total of 1,249 complaints have been filed. of which 911 have been decided with the issue of 64 orders of refund and 674 orders of possession. Most of the towers in the project were nearing completion and buyers wanted possession.
"This promoter was not complying with the RERA order initially. During the pandemic, compliance from all promoters was on the lower side, but after the pandemic, RERA increased pressure and compliance had started improving, "Ahmed said.
At the last meeting with the board of directors of this company on March 15, the company was told in no uncertain terms that they had to comply with the orders and they had shared a plan of compliance with RERA. But RERA was not satisfied with that plan of compliance given by the company (which was) given two weeks’ time to provide a revised completion plan based on which RERA would have monitored the compliance with those orders and the progress of the projects."
A moratorium has been imposed, which means that no complainant, no allottee can approach any forum-judicial, quasi-judicial, or the authorities-for any relief, and even the execution of the existing orders and decrees remains suspended. Buyers against whose cases orders have been issued should attach a copy of the RERA orders and submit their claim with the IRP. That is the course of relief available to these homebuyers right now. They cannot approach any other forum, "he explained.
Supertech was in the news when, on August 31, 2021, the Supreme Court ordered the demolition of its 40-storey under-construction twin towers located in Noida for violation of building norms in "collusion with Noida officials".
The apex court had directed that the entire investment of 633 homebuyers who had booked flats in the twin towers be refunded with 12 percent interest from the time of the booking. About 248 homebuyers took an early refund, while 133 took flats in other Supertech projects.
The court also directed Supertech to pay the RWA (resident welfare association) of the Emerald Court project Rs 2 crore for the harassment caused to them by the construction of the twin towers, which would have blocked sunlight and fresh air to existing residents of the housing project. In February, the Noida Authority informed the Supreme Court that the demolition of the towers would be completed by May. Work on the demolition has started.
In September 2021, the National Consumer Commission sentenced Supertech managing director Mohit Arora to three years in jail for failing to refund a homebuyer after not handing over possession of his house in UP's Yamuna Expressway Industrial Development Area (YEIDA) for several years.
Issuing an arrest warrant against Arora, the commission directed that its order come into effect after seven days if the builder failed to deposit around Rs 1.79 crore, a report in the Hindustan Times said.
A report in Business Standard in 2014 said Supertech chairman RK Arora was at one time a "small-time broker" who had gone on to become one of the biggest developers in northern India with 75 million sq.ft. under construction. The report said Supertech "grew to a company with revenues of Rs 1,874 crore in 2012-13 from Rs 218 crore in 2007-08, riding on the back of a real estate boom." Reports say the company was founded in 1988 and incorporated in 1995 with its registered office located in Delhi.
The group had made waves with its Supernova project, billed as being the tallest tower in northern India and the second-highest in India and had projected itself as a pioneer in the luxury construction space. It reportedly entered into tie-ups with the likes of Disney and Armani for its high-end luxury towers and had even roped in Bollywood actor Twinkle Khanna as a celebrity architect for one of its projects.