Supertech does not have sufficient funds to make refunds to home buyers, SC told

New Delhi, May 6 (IANS) The Supreme Court on Friday was informed that the embattled real estate firm Supertech Ltd. does not have sufficient funds to process refunds to home buyers who had purchased apartments in its 40-storey twin towers located in Noida and due to be demolished soon.

In August last year, the top court had ordered demolition of twin towers and ordered refund to the home buyers, who had purchased apartments.

Amicus curiae Gaurav Agarwal submitted before a bench headed by Justice D.Y. Chandrachud that the real estate firm does not have sufficient funds in its account to process refunds to home buyers.

Counsel for Supertech contended that it has engaged with the financial creditor Union Bank of India, to resolve the dispute in connection with payment of dues.

The bench, also comprising Justice Surya Kant, told Agarwal that a way out has to be found for the refund to the homebuyers.

Agarwal said as per Interim Resolution Professional (IRP), there are no sufficient funds in the accounts of the company for the refund. He added that there are 107 homebuyers who are yet to receive the refund and added that a report has been filed in a sealed cover as per the direction of the court.

The top court was informed that the erstwhile management of the firm has moved the National Company Law Appellate Tribunal (NCLAT) against the corporate insolvency resolution process and the matter is listed on May 17.

Senior advocate S. Ganesh, representing the erstwhile management of Supertech Ltd, submitted several rounds of meetings have been done so far with the bank and more are likely to take place to resolve the dispute over dues.

Agarwal added if the issue with the financial creditor is resolved, then the status of 107 home buyers out of over 711, will be back to what it was before the insolvency process was initiated.

The top court scheduled the matter for further hearing on May 18.

On April 4, the Supreme Court said it will protect the interest of Supertech's 40-storey twin tower home buyers in view of the appointment of IRP in the insolvency proceedings against the real estate firm. The top court directed to file by April 15 their claims for refund of payments.

The realty firm had informed the top court that it will be filing an appeal against the order of the National Company Law Tribunal (NCLT) declaring it bankrupt on a plea filed by the Union Bank of India for non-payment of around Rs 432 crore worth of dues.

A note submitted in the top court by Agarwal said: "As per the information given by Supertech Ltd, out of 711 customers/units, the claims of 652 units/customers are settled/paid. 59 homebuyers still have to refunded the amounts. The principal outstanding would be Rs 14.96 crore."