 "Supertech")
The National Company Law Appellate Tribunal (NCLAT) on Friday ordered starting of insolvency proceedings in only one of the housing projects of realty firm Supertech Ltd and not the entire company, and directed constitution of the Committee of Creditors for the said project only.
A two-member NCLAT bench limited the Corporate Insolvency Resolution Process (CIRP) to only "Eco Village II Project" located at Greater Noida (West).
On March 25, the Delhi bench of the National Company Law Tribunal (NCLT) had ordered to initiate the CIRP against Supertech Ltd over a petition filed by the Union Bank of India for non-payment of dues of around Rs 432 crore. However, this was challenged by Supertech promoter R K Arora before NCLAT.
NCLAT on April 12 stayed the formation of CoC as the promoters have sought some time to settle the matter with their financial creditor.
In its order pronounced on Friday, the NCLAT said project-wise resolution has to be started as a test to find out the success of such resolution.
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The NCLAT, while modifying its April 12 order, said Interim Resolution Professional (IRP) may constitute the CoC with regard to the project Eco Village II only.
"The Committee of Creditors of Eco Village II project shall start the process for resolution of Eco Village II project. The IRP shall separate the claims received with regard to the Eco Village II project and prepare an 'information memorandum' accordingly and proceed for the meeting of the CoC as per the Code," said NCLAT.
Moreover, it has also directed that even for Eco Village II project, the "IRP shall carry the project and continue the project as an ongoing project by taking all assistance from the ex-management, employees, workmen etc."
"We however make it clear that other projects apart from the Eco Village II project shall proceed as ongoing project basis under the overall supervision of the IRP," said the NCLAT bench comprising Chairperson Justice Ashok Bhushan and Member Naresh Salecha.
It has also directed to maintain a detailed account of all the inflow and outflow with regard to each project of Supertech Ltd to be separately maintained as per the 'RERA' guidelines.
"Seventy per cent of the amount received with regard to the project shall be utilised for construction purposes only. With regard to the disbursement of rest 30 per cent amount, we shall issue appropriate direction after receiving further status report and after hearing all concern subsequently," it said.
It has directed IRP to submit a "further status report within six weeks from today" regarding Eco Village II project and all other projects.
NCLAT observed that the promoters of Supertech has submitted that they will arrange interim finance to support the ongoing construction of the different projects by arranging finances as submitted in their settlement-cum-resolution plan.
Commenting on the NCLAT order, Arora said that "NCLAT has considered the interests of homebuyers who have invested in the projects of the company trusting its promoters. The company will now focus on implementing the resolution plan by clearing the debts, completing the projects and delivering the units to allottees."
The NCLAT said that promoters have also promised to clear the outstanding of all financial institutions including the financial creditors.
"The pendency of this proceeding shall in no manner hinder the appellant (Supertech promoters) to approach the financial creditors for entering into settlement with the financial creditors. With regard to the disbursement to the financial creditors, out of 30 per cent of the amount, we shall issue necessary direction after receiving the status report and receiving the progress of the projects," it said.
Supertech had offered to make an upfront payment of Rs 10 crore with 10 crore on acceptance of OTS (One-Time Settlement) and Rs 55 crore for exclusive security. However, it did not materialise as the bank had asked to deposit Rs 75 crore as upfront to consider the OTS.
NCLAT in its 21-page interim order observed that as per the status report filed by the IRP, it is clear that in the 20 projects, which Supertech is executing, substantial units have been sold.
"We further notice that the Union Bank of India who has initiated CIRP by filing Section 7 application has stated that it had given finance for Eco Village II project," the bench said.
Moreover, for Eco Village II project, there is another financial creditor -- IDBI Bank-- which has also filed an intervention application in the present matter.
"A large number of homebuyers who have filed intervention application has prayed that CIRP be confined to Eco Village II only. With regard to the other projects, the construction may be allowed to be completed so that homebuyers may get their flats," the appellate tribunal said.
However, CIRP has been commenced against all the projects of Supertech and its erstwhile promoters (appellant) has also filed a settlement proposal with an object to carry out the construction of all the projects.
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