The Supreme Court directed a forensic audit of Supertech Realtors and its parent company, appointed a three-member committee to take over and complete the stalled Supernova project in Noida, and fixed a “zero period” shielding homebuyers from any coercive recovery of dues by banks or the Noida Authority until the project is completed.
In a detailed order dated December 16 and uploaded on Monday, the apex court protected thousands of buyers from recovery proceedings while work on the distressed project is carried out by a new developer to be selected under court supervision.
A bench of Chief Justice of India (CJI) Surya Kant and justice Joymalya Bagchi said, “There shall be a ‘zero period’ in respect of payment of dues owed to the Noida authority and the financial lenders. Accordingly, no payments shall be made to these entities until completion of the project and handing over of the dwelling units to the homebuyers.”
During this period, the order added, neither lenders nor the authority shall initiate or continue any coercive action against buyers who have already paid for their apartments. Any surplus generated after completion will be used to settle outstanding dues.
The three-member committee will be headed by justice (retd) MM Kumar, former chief justice of J&K high court and former NCLT president, who will be assisted by Anoop Kumar Mittal – an expert in the field of construction, civil engineering and project management – along with Rajeev Mehrotra, an expert in financial management.
Setting out the committee’s broad functions, the court directed it to select a new developer for the project, carry out forensic audit of the erstwhile developer, and frame a plan for the smooth completion and execution of the project that will be monitored by the court next on January 20.
Ordering the forensic audit, the bench directed the panel to appoint a reputed and experienced firm to examine the accounts of both the corporate debtor and its parent company. It also laid down strict eligibility norms for the appointment of a new developer, barring any entity associated with Supertech or its erstwhile management from participating in the process.
The court directed all the receivables, unsold inventory and fresh collections from buyers to be deposited in an escrow account and shall be used for construction purposes only. Out of 2,863 housing units sold, possession has been granted for 1,121 units. About 5,251 units are lying unsold as construction is pending at various stages.
While all “operational decisions” regarding the implementation of the project shall be taken by the committee, the role of Supertech Realtors was limited to providing technical cooperation to the committee, besides providing office space, logistics, and honorarium of the committee, with the chairperson’s remuneration fixed at ₹10 lakh per month.
This committee will take over the day-to-day management of the Supernova project – a mixed-use real estate project comprising residential, commercial, office space, studio apartments, service apartments, shopping centres at Noida’s Sector 94. The project was initiated by Supertech Realtors Pvt. Ltd, which went into insolvency proceedings before NCLT.
The bench discharged the interim resolution professional, the committee of creditors and the board of directors of the corporate debtor, replacing them entirely with the court-appointed panel. The project had entered insolvency proceedings before the NCLT following a default case initiated by Bank of Maharashtra.
The banks, which had initiated the insolvency process, had argued before the court that their dues should be given primacy. However, court-appointed amicus curiae advocate Rajiv Jain urged the bench to prioritise homebuyers, noting that they had invested life savings while regulatory lapses and weak oversight by lenders allowed the situation to deteriorate.
The court noticed this failure on part of the banks and said, “Such inaction has substantially contributed to the present state of insolvency, and in this backdrop, the claim of primacy now asserted by the financial creditors over the interests of home buyers appears considerably weakened.”
While the committee may consult lenders, homebuyers and authorities such as Noida, its decisions will be final and binding on all stakeholders, the court said. It also permitted the panel to reconstitute itself if required to ensure speedy completion.
Further relief was extended to buyers with a direction to the Noida Authority to process approvals, licences and registrations expeditiously without insisting on clearance of past dues. This includes registration of sub-lease deeds for the remaining 497 apartments once buyers complete their payments.
The Supernova project was developed on 70,002 square metres of land at an estimated cost of ₹2,326.14 crore. The NCLT initiated the corporate insolvency resolution process on June 12, 2024, a decision upheld by the NCLAT in August and later challenged by Supertech promoter R K Arora before the Supreme Court.