The New Delhi Bench of the NCLT accepted a plea by Union Bank of India to initiate insolvency against debt-laden builder Supertech. In its Friday order, a two-member Bench of the National Company Law Tribunal (NCLT), headed by Justice PSN Prasad, said the documents submitted by the financial creditor Union Bank of India as well as the corporate debtor Supertech “substantiated” the former’s claim that there was a debt on which the builder had defaulted.
“In light of the above discussion, after giving careful consideration to the entire matter, hearing arguments of the parties and upon appreciation of the documents placed on record to substantiate the claim, this Tribunal admits this petition and initiates CIRP (corporate insolvency resolution process) on the Corporate Debtor with immediate effect,” noted the order.
The NCLT Bench has named Hitesh Goel as interim resolution professional for Supertech and placed the company under moratorium. Once a corporate debtor is admitted into insolvency, no new cases or claims can be filed against the company in any court of law, tribunal, arbitration panel or any other authority. Apart from this, the corporate debtor is also barred from transferring, encumbering, alienating, or disposing off of any assets.
In a statement, however, Supertech said that the NCLT order initiating insolvency against “one of the Supertech Group Companies” would not impact any other ongoing operations of the group company and that it was “committed to give delivery of units to allottees”.
“In the interest of homebuyers, preference was given to construction and delivery of projects over repayment of Bank dues which can be fulfilled after project completion. As all the projects of the company are financially viable, there is no chance of loss to any party or financial creditor,” the company said in a statement, adding that it would approach the National Company Law Appellate Tribunal (NCLAT) against the NCLT order.
Earlier on December 17, Union Bank of India had rejected a one-time debt settlement proposal submitted by Supertech.
On January 31, 2021, Union Bank had moved the NCLT claiming that Supertech had defaulted on payment of Rs 431.92 crore. In its plea, Union Bank had claimed that Supertech had in 2013 approached several financial institutions for a loan of Rs 350 crore. Of this, Union Bank was the lead bank with an exposure of Rs 150 crore. In 2015, Supertech approached Union Bank and other lenders for a second loan on the facility, and an extra credit of Rs 200 crore was extended by the lenders. Of this, Union Bank lent Rs 100 crore.
In April 2019, Union Bank sent Supertech two notices for repayments of the first and second loan under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act of 2002. Union Bank claims that Supertech did not respond to the notices or make any efforts for repayment of the debts, following which the accounts of the builder were declared non-performing assets (NPAs).
Earlier this year in January, Supertech faced the ire of the Supreme Court for not complying with its order on demolition of the 40-story twin towers. The top court had then warned that the directors of the company would be sent to jail for “playing truant”. The demolition of the twin towers has for now been scheduled for May 22.