SC tells Supertech to refund Emerald Court homebuyers

Close to 18 homebuyers filed contempt petitions in the Supreme Court alleging inaction by the real estate developer that had to refund the payments made by buyers, along with 12% interest.
The towers were declared illegal and ordered to be demolished by the Supreme Court on August 28 last year.(HT File Photo)
The towers were declared illegal and ordered to be demolished by the Supreme Court on August 28 last year.(HT File Photo)
Published on Jan 22, 2022 03:26 AM IST
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ByAbraham Thomas, Hindustan Times, New Delhi

The Supreme Court on Friday ordered real estate firm Supertech to refund the money collected from homebuyers for its 40-storey twin towers in Noida’s Emerald Court project by February 28. The towers were declared illegal and ordered to be demolished by the Supreme Court on August 28 last year.

Close to 18 homebuyers filed contempt petitions in the Supreme Court alleging inaction by the real estate developer that had to refund the payments made by buyers, along with 12% interest.

Earlier this month, the court took serious exception to the delay and threatened to send its directors to jail.

In its order passed on Friday, a bench of justices Dhananjaya Y Chandrachud and Bela M Trivedi said, “In our view, the refund due and payable arises from the judgment of this Court. At this stage when the court is exercising contempt jurisdiction, the solution has to be consistent with the tenor of judgment to enable refund with interest.”

To reconcile the difference in amounts of final payment, as calculated separately by Supertech and the homebuyers, the court took the assistance of advocate Gaurav Agrawal, who assisted it as amicus curiae and worked out the sum payable to each of the contempt petitioners after deducting the amount already paid.

The bench accepted the calculations made by Agrawal for 12 contempt petitioners and disposed the matter with a direction asking Supertech to refund the said amount as per the computation made by Agrawal on or before February 28.

Almost 252 homebuyers were awaiting refunds after the court ordered demolition of the towers last year.

The demolition process has also been finalised and this issue is being separately monitored by the top court.

Advocate Abraham C Mathews who appeared for some of the homebuyers urged the court that the sums payable by Supertech were in the average range of 30 to 60 lakh.

The two towers facing demolition (Apex and Ceyane) have 915 flats of which 633 were booked. Of them, only 252 flat buyers had to be paid refunds as 133 homebuyers chose to re-invest in other Supertech projects and 248 took an early refund.

The court told Supertech that deadline for refunds applied equally to those homebuyers who have not filed contempt petitions.

The bench said, “Homebuyers entitled to receipt of compensatory payment should not be compelled to move contempt proceedings.” However, it clarified that payments towards refund, if already paid, shall be considered while making the balance amount to homebuyers.

Senior advocate S Ganesh who appeared for Supertech assured the court that necessary steps will be taken within a week to ensure the refund as directed. He said that if bank details of buyers are known, the same could be electronically transferred.

Some homebuyers complained to the court that tax was being deducted at source (TDS) by Supertech before releasing the money to homebuyers. Advocate Sumit Agrawal appearing for a group of homebuyers said, “The interest on the principal amount is in the nature of compensation (not income).” Ganesh informed the court that the company cannot afford to be in default during tax assessment and any exemption in this regard must come from the court.

The bench refused to pass any order saying, “It is not a live issue before us. Even the income tax department is not part of these proceedings. At best we have said it is compensatory interest.”

Ganesh informed the court that in the event of demolition of the towers, the court should nudge the Noida Authority to return the 25 crore that the company deposited while purchasing extra FAR (the floor area ratio) for constructing the towers. “We have given an application to the Noida authority seeking a refund as there is no usage of FAR. But they are sitting on our application,” he said.

The court told Supertech that such a matter cannot be raised in a contempt plea.

In a lighter vein, the bench remarked, “You need not to be protected from Noida (Authority). They were with you all along.” In its judgment, the Court noted the collusion between Supertech and Noida officials which led to the construction of the two towers in violation of the National Building Code 2005, which mandates a minimum distance of 16 metres between two residential towers.

The order to demolish the two Supertech towers was first issued by the Allahabad high court in 2014 on a plea filed by the Emerald Court owners’ association who said that while purchasing their flats, what was shown as green area was now sought to be converted into residential towers, amounting to breach of trust by the developer. Supertech approached the apex court challenging the high court decision.

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Thursday, May 19, 2022