SC relief to homebuyers at twin towers in Noida

The order became necessary as the interim resolution professional (IRP) of Supertech failed to deposit the entire refund amount -- he deposited only ₹1.10 crore -- with the Supreme Court registry by August 31

Removing a major hurdle in the way of refunding ₹1.25 crore to 15 homebuyers of the now demolished Supertech twin towers in Emerald Court, Noida, the Supreme Court on Wednesday directed the Union Bank to release an amount of ₹15 lakh within 10 days to the realty firm, which is currently facing bankruptcy proceedings.

The 15 homebuyers were to be paid a total outstanding amount of ₹7.04 crore of which ₹2.55 crore remained (Sakib Ali/ HT Photo)

The order became necessary as the interim resolution professional (IRP) of Supertech failed to deposit the entire refund amount -- he deposited only ₹1.10 crore -- with the Supreme Court registry by August 31, as directed by the court on July 17.

The IRP failed to deposit the entire amount as Union Bank refused to pay its share of ₹15,51,678. The bank wrote to IRP on September 1 claiming that the amount cannot be paid as the twin towers – Apex and Ceyane -- are part of Supertech’s Emerald Court, which is not part of the insolvency proceedings.

Further, the bank claimed that it is not party to the proceedings in which the [court] order was passed and told the IRP that he is duty-bound to protect the interest of not only homebuyers but financial creditors as well.

A bench headed by Chief Justice of India (CJI) Dhananjaya Y Chandrachud said, “We direct the Union Bank to take steps within 10 days to ensure that an amount of ₹15,51,678 is released to Supertech for compliance with our order of July 17.”

Advocate Gaurav Agarwal, who is assisting the court as amicus curiae, brought this fact to the notice of the court in an application, attaching the bank’s letter and a communication received from IRP on September 7 indicating this position.

The 15 homebuyers were to be paid a total outstanding amount of ₹7.04 crore of which ₹2.55 crore remained. The court’s earlier order had directed that this amount be paid in two tranches and that the initial deposit of ₹1.25 crore be made out of the administrative expenses of Supertech.

The Court has posted the matter for further hearing to November 3 to follow up on the remaining payout.

It was on August 31, 2021, that the Supreme Court had ordered the demolition of 32-storey high twin towers over alleged violations of the National Building Code. Subsequently, the towers were demolished in a controlled implosion on August 28, 2022. The court further directed the affected homebuyers to receive full refund with 12% interest. In March last year, Union Bank approached the National Company Law Tribunal (NCLT) to declare Supertech bankrupt under the Insolvency and Bankruptcy Code (IBC) over unpaid dues.

The IRP was appointed to look after the affairs of the company and all expenses of the company were to be routed through IRP with approval of company law appellate tribunal.

Initially, of the 252 buyers who purchased flats in the twin towers, 56 remained to get a refund. The court was informed that for settling refund claims in full, Supertech would have to set apart almost ₹40 crore. The court has been monitoring the matter since then to ensure that all homebuyers get their full and final refund, regardless of the insolvency proceedings pending against the realty company.