File Copyright Online - File mutual Divorce in Delhi - Online Legal Advice - Lawyers in India

National Company Law Tribunal launches insolvency proceedings against Supertech

Supertech Limited has been placed in insolvency by the National Company Law Tribunal after it failed to repay a loan of Rs 431.92 crore to Union Bank of India.

Union Bank of India's application against debtor Supertech Limited was accepted by the NCLT. Since July of the year 2019, Supertech had not serviced their obligation.

Supertech is one of India's major real estate developers, with 32 years of experience in the National Capital Region.

The coram of members P.S.N. Prasad (Judicial), and Rahul Bhatnagar (Technical), by the order dated 25.03.2022, prima facie decided that the Union Bank of India is entitled to claim its outstanding financial-debt owed by Supertech, because Supertech has been found in default with regards to non of financial debt to Union Bank of India.

P.S.N. Prasad and Rahul Bhatnagar, acknowledged the Union Bank application submitted under section 7 (5)(A) of the Insolvency and Bankruptcy Code, 2016, in an order dated March 25, 2022.

In accordance with Section 14 of the Insolvency and Bankruptcy Code, 2016, the aforementioned bench declared a moratorium.

Certain restrictions have been put on Supertech, including the suspension of any current cases against Corporate Debtor/any new suits filed against Corporate Debtor, the transfer/alienation/disposition of any of Corporate Debtor's assets by Corporate Debtor, and so forth.

Another direction issued by the NCLT Bench in New Delhi is that the moratorium provisions will not apply to transactions notified by the Central Government/supply of essential goods or services to Corporate Debtor as may be specified, and that such transactions will not be suspended or interrupted during the moratorium period.

Furthermore, in light of section 14(3)(b) of the Code, held by the NCLT Bench in New Delhi, terms of moratorium shall not apply to the surety in a contract of guarantee to the corporate Debtor.

Sections 15, 17, 18, 19, 20, and 21 of the Code also contain instructions for Interim Resolution Professionals on how to conduct themselves.

The NCLT order issued on Friday clarifies that all employees of Supertech Limited, its promoters, or any other person associated with the management of the Corporate Debtor have a legal obligation under Section 19 of the Code to assist and cooperate with the IRP in managing Supertech's day-to-day operations.

Union Bank of India had filed an application with the National Company Law Tribunal's Principal Bench in New Delhi, requesting the start of the Corporate Insolvency Resolution Process (CIRP) for an alleged default of Rs 431,92,53,302.

The following are the facts stated in the Union Bank of India's application claiming Supertech's misconduct:
  • In 2013, M/s Supertech Limited (Corporate Debtor) sought a number of financial institutions, including Financial Creditor, to get a Rs 350 crore credit facility from a group of banks. The Lead Bank, as a financial creditor, had a Rs 150 crore exposure. The major reason for taking out the loan was to help fund the development of Corporate Debtor's Eco Village project. The estimated budget for the project was Rs 1106.45 crore.
  • Following that, Supertech was awarded a credit facility of Rs 150 crore for the development of the Eco Village II Project via a sanction letter dated 19.10.2013 and a revised letter dated 16.12.2013.
  • Supertech had provided property title deeds for the purpose of establishing an equitable mortgage on the property via a memorandum of deposit of title deeds dated December 30, 2013, in accordance with a loan arrangement between Union Bank of India and M/s Supertech Limited.
  • Supertech engaged the Financial Creditor and Bank of Baroda (previously known as Vijaya Bank) for part-financing the project's Phase-II construction. Union Bank of India and Bank of Baroda agreed to provide the Respondent a second credit facility worth Rs 200 crore, with the Financial Creditor's total exposure being Rs 100 crore. Union Bank of India granted Supertech credit facilities via a sanction letter dated November 21, 2015, which was revalidated via a sanction letter dated August 11, 2016. On September 7, 2016, M/s Supertech, Union Bank of India, and Bank of Baroda signed a Construction Facility Agreement. The Corporate Debtor supplied the Title Deeds of the Subject Property to the Union Bank of India and Bank of Baroda for the construction of a pari-passu mortgage in order to secure the credit facility from the Union Bank of India and Bank of Baroda.

Supertech's Contentions
  • Financial Creditor filed an application through an official who was not an authorised person
  • The filing of Form 1 by Union Bank of India did not comply with Sections 7 and 215 of the IBC.
  • The classification of nonperforming assets (NPAs) is against RBI standards.
  • The lenders were restricted from filing any action for winding up, liquidation, bankruptcy, or insolvency as a result of the inter creditor agreement.
  • Furthermore, the counsel for Supertech Limited claimed that they offered a one-time settlement approach that was rejected by Financial Creditor.
  • In light of sub section 3(b)(7) of the IBC Code, 2016, it is required for the applicant to provide the name of an Interim Resolution Professional, which is why Hitesh Goel was appointed as IRP by applicant Union Bank of India.

Other Well-Known Cases Pertaining To Insolvency
Jaypee Infratech
  • On the request of an IDBI Bank-led consortium, Jaypee Infratech was placed into insolvency in August 2017. The state-owned NBCC received authorisation from the NCLT to acquire the insolvent Jaypee and build 20,000 flats (approximately) in three and a half years.
  • Lenders rejected Lakshadweep's Rs 7,350-crore proposal in the first phase of insolvency proceedings in 2019, which was part of the Suraksha Group.
  • In the second round, held in May-June 2019, the CoC rejected Suraksha Realty and NBCC's bids.
  • The case was first heard by the National Company Law Appellate Tribunal (NCLAT), then by the Supreme Court.
  • On November 6, 2019, the Supreme Court ordered that Jaypee Infratech's insolvency process be completed within 90 days, and that only NBCC and Suraksha Realty be called to submit updated resolution plans.

3C Projects
NCLT In has started insolvency proceedings against 3C projects. In this instance, the NCLT determined that the builder was in default since he failed to deliver residences to customers within 33 months despite collecting Rs 1.41 crore.

Spaze Tower Pvt Ltd
This lawsuit involves 40 customers who purchased commercial space in Gurgaon and were promised that the builder would reimburse their investment at a rate of Rs 55 or Rs 65 per square foot per month till the office units were leased out. The National Company Law Appellate Tribunal (NCLAT) has ruled that arrears of assured returns and money owing by a builder to a buyer with whom a payment agreement is in existence qualify as 'financial debt.'

MGF Developments
Insolvency proceedings against MGF Developments were terminated in December 2021, following a settlement between buyers and the company. According to the NCLT Order, the builder was required to pay the buyers the entire Interest Bearing Maintenance Security sum plus interest. The Villas Condominium Residents Association has filed a complaint alleging that the agreement's terms have been violated.

Lavasa
In December 2021, Darwin Platform Infrastructure Limited won a Rs 1,864 crore bid to buy Lavasa Corporation through an insolvency process authorised by the debt-ridden company's lenders. In 2018, it was sent to NCLT. CIRP was launched in response to a request by Hindustan Construction Company.

Developers Ariisto
Prestige Estates Projects purchased bankrupt Ariisto Developers Pvt. Ltd under the IBC Code in June 2021. Lenders received an upfront payment of Rs 370 crore.

Law Article in India

Ask A Lawyers

You May Like

Legal Question & Answers



Lawyers in India - Search By City

Copyright Filing
Online Copyright Registration


LawArticles

How To File For Mutual Divorce In Delhi

Titile

How To File For Mutual Divorce In Delhi Mutual Consent Divorce is the Simplest Way to Obtain a D...

Section 482 CrPc - Quashing Of FIR: Guid...

Titile

The Inherent power under Section 482 in The Code Of Criminal Procedure, 1973 (37th Chapter of t...

Increased Age For Girls Marriage

Titile

It is hoped that the Prohibition of Child Marriage (Amendment) Bill, 2021, which intends to inc...

Sexually Provocative Outfit Statement In...

Titile

Wednesday, Live Law reported that a Kerala court ruled that the Indian Penal Code Section 354, ...

UP Population Control Bill

Titile

Population control is a massive problem in our country therefore in view of this problem the Ut...

Privatisation Of Government Sector

Titile

Privatization of presidency Sector Although in today's time most of the services provided in ou...

Lawyers Registration
Lawyers Membership - Get Clients Online


File caveat In Supreme Court Instantly