SC to examine NBCC proposal to execute Supertech projects next week
NBCC is nearing completion of the Amrapali projects which involve 46,000 residential units while Supertech involves completion of over 50,000 units
NEW DELHI: The Supreme Court has agreed to hear next week an application by the state-run construction firm NBCC (India) Ltd expressing willingness to complete the unfinished housing projects of Supertech, the real estate major facing insolvency proceedings.
A bench headed by justice Sanjiv Khanna agreed to take up the application for hearing on October 1 after homebuyers in some of the Supertech projects informed the court that NBCC had already submitted its terms and conditions before the National Company Law Appellate Tribunal (NCLAT) where the insolvency proceedings filed by Union Bank are pending against Supertech group.
Supertech currently has 17 incomplete projects across the country and under the proposal submitted by NBCC before NCLAT, it had agreed to completion of seven projects in Noida and Greater Noida under first phase, five projects in Noida, Greater Noida and Meerut in the second phase, and remaining five projects in Gurugram, Rudrapur, Bengaluru and Dehradun in the third phase. The plan was subject to a set of terms and conditions being approved by the tribunal.
In its application before the top court, NBCC said that considering its proven track record in completing the Amrapali projects under court monitoring, the company seeks to submit proposals and terms of reference for the “feasible Supertech projects” on similar terms as in the Amrapali projects. This will, however, be subject to the orders of the court in the larger interest of home buyers, banks, financial institutions, and further “in the interest of execution and completion of the projects”.
Senior advocate Gopal Jain appeared virtually in the matter for NBCC and agreed to put forth the submissions next Tuesday.
NBCC’s application was mentioned by advocate ML Lahoty, who appeared for Eco Village 2 homebuyers and welcomed the move.
Despite the project being included in the first phase of the proposed construction plan of NBCC, the members of this project were aggrieved by a direction passed by the top court on May 11, 2023 which stalled insolvency proceedings regarding this project. The court restrained the committee of creditors from proceeding beyond voting on the resolution plan.
Lahoty informed the court that the homebuyers of Eco Village 2 have sought modification of the May 2023 order pointing out that crucial information regarding siphoning of funds from Eco Village 2 was not available to the court at the time of the passage of the order.
He said that the Transactional Audit Report of Supertech released in June 2023 suggested that the Eco Village 2 project is financially sound as it was found that an amount of ₹619 crore was either diverted to other Supertech projects or was siphoned off by the erstwhile promoters of the real estate firm.
NBCC is nearing completion of the Amrapali projects which involves 46,000 residential units while the Supertech involves completion of more than 50,000 housing units. In its terms and conditions, the NBCC said that it will require 12 to 36 months for completion of various projects subject to various conditions. These conditions involved acceptance of terms of reference, completion of due diligence or audit of such project, obtaining requisite permits/approvals from statutory bodies, award of work(s) to contractors, handover of peaceful and vacant possession of project sites to NBCC that are capable of commencement of work, and availability of funds earmarked for each project.
The NBCC proposed that a court committee could be set up to monitor the completion of projects and arrange funds to be placed in a designated account in the name of NBCC (I) Limited- Supertech unfinished projects, that is to be owned, operated and managed by NBCC through its authorised signatories.
Before starting work, NBCC has proposed to submit a project-wise report based on due diligence to its satisfaction. This report will form the basis for the court committee to accord its approval on a case-to-case basis, known as stage I approval. Funds would be approved by the committee within one month of the approval. In the event such funds are not arranged within the said period, NBCC’s obligations will stand suspended, the company stated in its terms and conditions.
For completion of the projects, NBCC demanded a fee calculated at the rate of 8% on the “Actual Cost of Work” for rendering the project management consultancy services and a marketing fee at the rate of 1% on the sale value of the project.