Court-monitored resolution process needed for 'Supernova' project: Amicus to SC

New Delhi, Sep 12 (PTI) The Supreme Court on Friday was suggested to adopt a court-monitored hybrid resolution mechanism on the line of Amrapali and Unitech Groups but headed by former apex court judge Navin Sinha for completion of the Supertech Realtors' ambitious 'Supernova project' in Noida.

Supertech Realtors is a wholly owned subsidiary of the beleaguered realty major Supertech Ltd which is facing insolvency proceedings and is constructing a mixed-use real estate project 'Supernova' consisting of residential, commercial, office space, studio apartment, service apartment and shopping centers in Sector 94 of Noida.

The building under the project is believed to comprise 80 floors, being the tallest building in Delhi-NCR with a 300-metre height.

Advocate Rajiv Jain, assisting in the matter related to insolvency proceedings of the project, informed a bench of Justices Surya Kant and Joymalya Bagchi that all stakeholders including homebuyers, financial creditors, banks, financial institutions and others have expressed confidence in a court-monitored process of resolution.

"The evolved jurisprudence in the cases of Amrapali, JAL/YEIDA (Jaypee Group case), and Supertech reveal a clear trajectory; when ordinary insolvency processes fail to protect homebuyers, the judiciary has not hesitated to innovate," the report of the amicus said.

The report said in the present matter too, a court-monitored hybrid mechanism, strengthened by the fit and proper standard for developers and project managers, was both necessary and viable.

"Such a framework will balance the rights of financial creditors with the overriding need to deliver homes to buyers, thereby achieving the 'complete justice' that this court has repeatedly sought to achieve in analogous cases," it added.

The report suggested the appointment of a former top court judge or a former chief justice of a high court for closer supervision of the resolution mechanism and to empower them in order to avoid frequently coming to court.

Jain suggested the name of former apex court judge Navin Sinha and former chief justice of Jammu and Kashmir High Court M M Kumar, former president of NCLT and former member of NHRC supervising the process.

"The promoter/appellant should be displaced from control; if necessary, his role may be limited to technical co-operation only. Further, the key management personnel should also not be part of any resolution mechanism," he said.

The report suggested a forensic audit of the accounts of the Supertech Realtors and its parent company Supertech Ltd by a "reputed and experienced" entity.

The amicus said the opinions of the homebuyers were divided over the model of resolution process to be adopted for completion of the project.

He said Supernova Apartment Owners Association, represented by advocate Govind Jee in the apex court, opposed the engagement of the co-developer Parmesh Construction Company Limited (PCCL), of the Bhutani Infra group.

The association contended that a suspended director cannot be allowed to choose a co-developer.

Jain, who held discussions and took suggestions from all stakeholders, told the bench that court-monitored resolution process, whilst non-traditional, is legally viable under this court's plenary powers under Article 142 of the constitution.

"It ought to ensure a balanced outcome: financial creditors retain recourse to surplus recoveries once projects are complete, while homebuyers obtain the delivery of their long-awaited flats/units. Importantly, it avoids the inequity of liquidation, which would extinguish buyers’ hopes and leave only fragmented assets," Jain submitted in his report.

The bench posted the matter for further hearing on September 17.

The 721-page report of the amicus further suggested the court to appoint a new board of directors of the Supertech Realtors and a Project Management Consultant, like the NBCC for completion of the ambitious project.

The amicus also suggested to the court that the Interim Resolution Professional appointed by the insolvency tribunal should be changed as despite her appointment many months back, she has not been able to take control of the company. PTI MNL MNL AMK AMK