The National Company Law Tribunal (NCLT) has mandated that Supertech Realtors, which is building a luxury hotel, office space, retail space and residential apartments at its Supernova project, face bankruptcy. Images via Wikimedia Commons
Supertech Realtors, the company building the Supernova project, which includes residential apartments, offices, retail space and a five-star hotel, has been ordered by the National Company Law Tribunal (NCLT) to begin an insolvency procedure.
The Bank of Maharashtra filed an insolvency plea over a default of Rs 168.04 crore, and the Delhi bench of the NCLT, consisting of two members, accepted it. Anju Agarwal was designated as the interim resolution professional (IRP), and the board of Supertech Realtors, a step-down subsidiary of Supertech, was suspended.
A Corporate Insolvency Resolution Process (CIRP) is another issue Supertech is dealing with.
At a cost of Rs 2,326.14 crore, Supertech Realtors is building the Supernova project on a 70,002 square metre plot of land in Sector 94, Noida.
According to the designs, the 300-meter-tall Supernova project will feature 80 stories and be the highest structure in Delhi-NCR.
Supertech Realtors applied for a Rs 7,35.58 crore loan for the project from a group of lenders headed by Union Bank of India. In addition, it had asked for and received a Rs. 150 crore credit facility from Bank of Maharashtra.
Supertech Realtors, on the other hand, breached and violated the credit limit, neglected to uphold financial discipline, and defaulted on maintaining the aforementioned accounts, which resulted in a significant amount of outstanding debt.
The real estate company also recognised this, and the corporate debtor (Bank of Maharashtra) stated that no additional payments of the outstanding balance were made in spite of several requests and warnings. It then went up against NCLT.
The real estate company contested the plea on technical grounds, arguing that the dates of default in the aforementioned petition are inconsistent and differ from one another.
It claimed that September 28, 2018, is the date that the creditor considers the non-performing asset to be. As a result, the aforementioned application is not only flawed but also subject to dismissal due to legal limitations.
It also argued that it was a victim of the financial crisis and economic downturn that bedevilled the real estate sector. Also, the years 2010 to 2015 were utterly unpleasant and unsettling because of the protests and additional compensations from farmers and landowners.
Nevertheless, the NCLT stated that after reviewing the documentation, it is confident that the Bank of Maharashtra meets the criteria for being a financial creditor, that the loan was given to Supertech Realtors, and that there is 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.
In accordance with the provisions of the Insolvency & Bankruptcy Code, the NCLT also imposed a moratorium on any transactions pertaining to Supertech Realtors.
The 34-page NCLT judgement stated, “We direct that public announcement shall be made by the Interim Resolution Professional immediately” upon the acceptance of the insolvency application.