The Supreme Court on Friday rejected Supertech homebuyers’ petition seeking to restrain the real estate firm’s former directors/promoters from alienating their personal assets and also furnish details of their personal properties, bank accounts and other assets.
However, the apex court gave liberty to homebuyers to pursue their remedy before the National Company Law Appellate Tribunal (NCLAT).
While Supertech was declared bankrupt by the National Company Law Tribunal (NCLT), the NCLAT had last month stayed the formation of the committee of creditors (CoC) under the insolvency proceedings as the real estate developer sought time to negotiate with banks.
A Bench led by Justice DY Chandrachud, while refusing to intervene, asked the homebuyers to approach the NCLAT, where the matter is pending as of now. “Once the IBC process has begun, you need to follow the rigours,” it said.
Around 104 homebuyers had moved the SC wanting SFIO to investigate the affairs of the company and submit a report on diversion of funds by these erstwhile promoters, besides a direction to the government to constitute an appropriate committee to look into their grievances.
Seeking project-wise insolvency of Supertech, the homebuyers said they being unsecured financial creditors have a limited role to play and the interest of secured financial creditors has been given priority over them.
Homebuyers had sought protection of their fundamental rights, saying that the sole purpose of admitting the liability by Supertech was to evade all its claims and liabilities towards them and they have been left high and dry without any remedy under the law. “Further, it is apparent from the very fact that crores of rupees raised by Supertech through homebuyers and financial institutions have been diverted by Ram Kishore Arora and Mohit Arora who are directors/promoters of Supertech and thus are trying to flee from the country. Several FIRs have also been lodged against these directors for their illegal and criminal acts,” the petition stated.
The homebuyers told the SC that the admission of debt and liability towards the claim of Union Bank of India strengthens the collusion of the secured financial creditors and the real estate companies whose sole interest is selling the assets and not completion of the projects in order to recover the amount due and payable to them.
The NCLT, despite being aware that insolvency sought is of a real estate developer, ought to have ordered for project-wise insolvency so that even during the CIRP every project would proceed at its pace towards completion of the project, the petition filed through counsel Gaurav Goel stated.