Prominent Noida Developer Supertech ORB Under NCLT Scrutiny

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    Supertech ORB, a prominent real estate developer engaged in the construction of high-end residential apartments in the southeastern suburbs of Delhi-NCR, is grappling with the admission of a petition for bankruptcy resolution. This development potentially disrupts the possession timelines for numerous homebuyers in one of Noida’s most exclusive residential areas.

    Last week, the Allahabad National Company Law Tribunal (NCLT) accepted a petition filed by Assets Care and Reconstruction Company (ACRE), an asset reconstruction company supported by Ares SSG Capital. The NCLT has appointed Shailendra Ajmera, with EY’s backing, as the interim resolution professional. Notably, Ajmera is also responsible for managing the resolution processes for Go Airlines and Mittal Corp, among other entities.

    This setback is further exacerbated by the incarceration of Supertech ORB’s promoter, R K Arora. Arora faces allegations of money laundering and defrauding homebuyers, as confirmed by a senior bank official.

    Supertech ORB Project Pvt Ltd is actively constructing North Eye Cape Town in Noida, featuring four luxurious high-rise towers. The company had previously secured a substantial loan of Rs 349 crore from Altico Capital. However, this loan was transferred to ACRE in 2021 following Altico’s cessation of operations in India. Notably, Supertech Ltd.’s Eco Village project underwent corporate insolvency proceedings last year, instigated by a petition from Union Bank of India and India Bulls ARC. The Eco Village project’s twin towers were demolished last year in response to a Supreme Court ruling that deemed them illegal.

    In a legal twist, Supertech’s counsel contended that the Supreme Court’s ruling on May 5, 2023, favored project-specific resolutions rather than encompassing the entire corporation in the corporate insolvency process. Nevertheless, ACRE has lodged a claim with the resolution professional of Supertech Ltd, which had guaranteed loans for Supertech ORB. The NCLT dismissed this argument, affirming that lenders for both projects were distinct and that the present borrower (ACRE) should not be precluded from initiating the Corporate Insolvency Resolution Process (CIRP) against the principal borrower.

    In September 2022, the borrower had entered into an agreement to settle a Rs 353 crore loan. The lender alleges that instead of adhering to the settlement agreement’s terms to discharge its obligations, the corporate debtor sought to falsify certain documents indicating fulfillment of its obligations, as indicated in the settlement agreement. The same order notes that the corporate debtor had diverted funds from other units pledged in favor of ACRE. Consequently, the lender terminated the settlement loan agreement and recalled Rs 482 crore, encompassing Rs 225 crore in principal loans, Rs 202 crore in interest, and Rs 55 crore in default interest, on March 31, 2023.

    For the homebuyers invested in Supertech ORB’s residential apartments, the NCLT’s admission of the insolvency petition introduces considerable uncertainty. Delays in possession and the intricacies of the insolvency process may impede their aspirations of owning homes in this prestigious sector of Noida. The legal battles and financial turmoil surrounding the developer cast doubt on the project’s future.

    In the months to come, legal proceedings, negotiations, and decisions will shape the path forward for Supertech ORB and its stakeholders. While the insolvency process aims to resolve financial challenges, the ultimate objective is to provide relief and solutions to both homebuyers and creditors.

    As the situation unfolds, it is imperative to stay informed about the progress of insolvency proceedings and remain vigilant for any updates regarding this complex scenario.

    Also Read: NCLT Approves Ace Infracity’s Resolution Plan for Debt-Ridden 3C Homes, Offering Hope to Allottees

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