Supreme Court Halts NBCC’s Role in Supertech Projects
The Supreme Court of India has temporarily halted the appointment of the National Buildings Construction Corporation (NBCC) as the project management consultant for 16 stalled housing projects linked to the financially troubled real estate firm Supertech Ltd. These projects, valued at approximately ₹9,500 crore, have left nearly 27,000 homebuyers in limbo, awaiting possession of their homes. The court’s decision comes in response to appeals challenging a directive from the National Company Law Appellate Tribunal (NCLAT) that had assigned NBCC the task of completing these projects.
Concerns for Homebuyers
During a recent hearing, a bench led by Chief Justice Sanjiv Khanna expressed significant concerns regarding the fate of thousands of homebuyers affected by the stalled projects. The NCLAT had previously ordered NBCC to oversee the completion of 16 housing projects across various states, including Uttar Pradesh, Uttarakhand, Haryana, and Karnataka. This directive was issued following a Supreme Court ruling from October 2014, which allowed the NCLAT to evaluate proposals for completing stalled housing developments.
The Supreme Court has now issued notices to all parties involved and has stayed the NCLAT’s directive. The bench emphasized the need to review whether the proper procedures under the Insolvency and Bankruptcy Code were followed in appointing NBCC. As the situation unfolds, homebuyers are left anxiously awaiting clarity on when they might finally receive their homes. The court has instructed all stakeholders to submit written responses outlining alternative plans for completing the unfinished projects without NBCC’s involvement. The next hearing is scheduled for the first week of April, leaving many in uncertainty.
Supertech’s Response to the Court’s Decision
In light of the Supreme Court’s stay, Supertech’s chairman, R K Arora, expressed relief and support for the court’s decision. He stated that the ruling respects the interests of all stakeholders, including land authorities and lenders. Arora emphasized the importance of finding a solution that addresses the needs of all parties involved, particularly the homebuyers who have been waiting for their properties.
Supertech has been actively seeking a resolution that benefits all stakeholders, including homebuyers, bankers, and land authorities. The chairman’s comments reflect a commitment to transparency and collaboration in resolving the ongoing crisis. As the company navigates its financial difficulties, it remains focused on ensuring that the interests of homebuyers are prioritized in any proposed solutions.
The Future of NBCC’s Involvement
The NCLAT had set ambitious timelines for NBCC to begin awarding contracts by March 31, 2025, with construction expected to start by May 1, 2025. The tribunal’s directive also included the formation of an apex court committee and individual project committees for each stalled development, with NBCC nominating members to these committees. However, the Supreme Court’s recent intervention has cast doubt on these plans.
NBCC had submitted a comprehensive three-phase completion plan for several key residential projects, including Eco-Village-2, Capetown, Northeye, Upcountry, Meerut Sports City, and Micasa in Bengaluru. With the Supreme Court’s stay, the future of this plan is now uncertain. Stakeholders are left to ponder the implications of the court’s decision and what it means for the completion of these vital housing projects.
Ongoing Insolvency Proceedings
Supertech’s financial troubles began in March 2021 when the Union Bank of India initiated insolvency proceedings against the company, claiming over ₹431 crore. In May 2023, the Supreme Court allowed a “project-wise resolution” approach, enabling construction to proceed under the supervision of an interim resolution professional. However, with the Supreme Court now advocating for a broader resolution beyond NBCC, the fate of thousands of homebuyers remains precarious.
As the legal battle continues, homebuyers are left in a state of uncertainty. The Supreme Court’s next hearing in April will be crucial in determining the future of Supertech’s projects and the prospects for the homebuyers who have been waiting for years. Until then, the situation remains fluid, with many stakeholders hoping for a resolution that prioritizes their interests and brings clarity to this complex issue.
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