NCLT admits insolvency plea against Supertech ORB, Real Estate News, ET RealEstate
Supertech ORB, which is constructing ultra-luxury high-rise residential apartments in the southeastern suburbs of Delhi-NCR, has been admitted for bankruptcy resolution, potentially delaying possession for homebuyers in one of Noida’s most upscale residential sectors.
Already, thousands of homebuyers at Supertech’s other project – along the Noida-Greater Noida Expressway – have suffered a setback after the twin towers were erased for faulty construction and violation of rules.
Last week, the Allahabad National Company Law Tribunal admitted a petition filed by Ares SSG Capital-backed Assets Care and Reconstruction Company (ACRE), an asset reconstruction company (ARC), to admit Supertech ORB. The tribunal has appointed EY-backed Shailendra Ajmera as interim resolution professional. Ajmera is also RP for Go Airlines and Mittal Corp, among others.
The hope of possessing homes in the near future is dim considering that the promoter R K Arora is behind bars on allegations by the Enforcement Directorate of money laundering and cheating home buyers, a senior bank official said.
Supertech ORB Project Pvt Ltd is in the process of constructing North Eye Cape Town in Noida, which has four ultra-luxury high-rise towers. The company had taken Rs 349 crore loans from Altico Capital. This loan was assigned to ACRE in 2021 after Altico shut down its operations in India.
Supertech Ltd‘s project Eco Village was admitted for corporate insolvency last year based on a petition by Union Bank of India and India Bulls ARC. The twin towers of the Eco Village project were demolished last year following a Supreme Court‘s verdict that they were illegal.
Supertech’s legal counsel had argued that the Supreme Court on May 5 2023, ruled project-wise resolution rather than admitting the entire company for corporate insolvency. Also, ACRE has filed a claim with RP of Supertech Ltd’s, which guaranteed loans of Supertech ORB.
NCLT rejected this argument, stating that lenders of both projects are different and the present borrower (ACRE) “cannot be precluded from seeking to initiate CIRP against the principal borrower.”
In September 2022, the borrower had signed an agreement to settle Rs 353 crore loan. The lender has alleged that the “instead of complying with the terms of the settlement agreement, to discharge its liability, the corporate debtor tried to forge certain documents to show discharging of its liability as agreed in the settlement agreement.” As per the order copy. “Also, it has been found that the corporate debtor has been siphoning off funds from other units mortgaged in favour of the applicant (ACRE),” the same order says.
Following this, the lender terminated the settlement loan settlement agreement and recalled Rs 482 crore, including Rs 225 crore principal loans, Rs 202 crore as interest amount and Rs 55 crore as default interest on March 31, 2023.