Supreme Court seeks timeline from Supertech to refund homebuyers

The Supreme Court on Friday directed the Supertech group to prepare by October a timeline for the disbursal of refund of money to the homebuyers of the Emerald Court twin towers which are set to be brought down in a controlled demolition on Sunday

The Supreme Court on Friday directed the Supertech group to prepare by October a timeline for the disbursal of refund of money to the homebuyers of the Emerald Court twin towers which are set to be brought down in a controlled demolition on Sunday.

Noida, India- August 26, 2022: A view of Supertech Twin Tower ahead of its demolition at Sector 93A, in Noida, India, on Friday, August 26, 2022. (Photo by Sunil Ghosh / Hindustan Times) (Hindustan Times)

The Supreme Court ordered on August 31 last year that the 32-storey towers be brought down due to violations, and the affected homebuyers who invested in apartments in the under-construction project were promised full refund with 12% interest.

In March this year, one of the creditor banks approached the National Company Law Tribunal (NCLT) to declare Supertech bankrupt under the Insolvency and Bankruptcy Code (IBC) over unpaid dues. This dashed the hopes of homebuyers of the Supertech twin towers seeking immediate refund of their amounts. An interim resolution professional (IRP) was appointed to look after the affairs of the company. Later, the appellate authority, NCLAT, restricted insolvency proceedings to just one project of Supertech. However, all expenses of the company were to be routed through IRP with the approval of NCLAT.

With about 56 homebuyers still waiting for refunds of the 252 who were initially entitled, a three-judge bench led by justice Dhananjaya Y Chandrachud on Friday said, “It is agreed that in the first week of October, the IRP and the amicus curiae will have a joint meeting to make available the details of net revenue inflows (from June to September), money required to complete other Supertech projects, estimated realisation from inventory sale, and expenses of running the company. Based on this, a timeline can be made for payment of refund in full.”

Amicus curiae (friend of court) advocate Gaurav Agarwal informed the court that based on discussions held with IRP Hitesh Goel, the company currently maintained an inflow of ₹20 crore every month, of which a substantial amount was going into construction cost. He informed the court that to settle refund claims in full, Supertech required to set apart almost ₹40 crore. In the present situation, he said, the IRP was agreeable to release ₹1 crore and in October, and a further timeline for disbursal of refund can be worked out.

The bench, also comprising justices AS Bopanna and JB Pardiwala said, “We direct the IRP to deposit ₹1 crore on or before September 30 so that the homebuyers can get some refund. The IRP and the amicus curiae shall work out the outstanding claims of homebuyers and submit details on the next date so that direction on disbursal can be issued.”

Agarwal told the court that while passing any orders, the interest of other homebuyers in other Supertech projects should be considered. The bench said, “We share the anxiety of the homebuyers in the present proceedings as this is all pursuant to our judgment. But we have to be careful before passing any direction as anything we order (as refund) will take away the amount meant for construction.”

The court was further informed that some amount had to be set apart for the demolition of the twin towers. The amicus said that everything was set for the demolition to take place on Sunday. The Noida authority, represented by senior advocate Ravindra Kumar, said that the demolition of the towers had become a “media spectacle”.

The demolition was first ordered by the Allahabad high court in 2014on a petition filed by Supertech Emerald Court Apartment Owners’ Association. The top court upheld the high court order finding the project illegal as it was constructed on a green area shown to the residents while purchasing flats. Further, the distance between the two towers was in violation of the minimum distance rule prescribed by the National Building Code, 2005.

Of the 633 people who booked flats in the twin towers, 248 homebuyers took an early refund while 133 took apartments in other Supertech projects, leaving 252 homebuyers who awaited the final outcome of the case by the top court.

“We tried to get the refund after the high court ordered the demolition of the twin towers in 2014, but due to the delay (the case being moved to Supreme Court), we accepted the realtor’s offer of shifting to another project--Pavilion society--in Sector 34. Unfortunately, many of use who chose to shift to another project of Supertech’s are yet to register our homes because the realtor has not got requisite approvals from the Noida authority. We are fighting a case in Supreme Court against the developer for justice,” KK Mittal, who had in 2009 booked a 2BHK flat in Apex tower, said.