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Supertech twin towers demolished on 28 August 2022

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Supertech twin towers case: Supreme Court sets Aug 28 as new demolition date - Cities News

The illegal twin towers built by Supertech, which are taller than Qutub Minar, will be finished on 28 August at 2:30 PM. After around nine years of implacable efforts by the Residents Welfare Association (RWA) of the Supertech Emerald Court, the Supreme Court (SC), ordered the demolition of the two unlawful constructed buildings – Apex and Ceyane in August 2021. The welfare association claimed that the construction of these two twin towers violated the UP Apartments Act of 2010. Further, details mentioned by propertywala.com.

Noida Twin Towers Demolition:

Real estate firm Supertech Ltd built the Noida twin towers and was the dream house of many. According to the Press Trust of India (PTI), the Noida twin towers will literally fall down like a house of cards in a process that would take less than 10 seconds for them. The Residents Welfare Association (RWA) of Emerald Court Group Housing Society in UP’s Noida filed a petition in Allahabad High Court against Supertech in 2014.

Besides, the twin towers namely – Apex and Ceyane towers are parts of the Emerald Court project of Supertech. It is a prominent construction company in the Delhi-NCR region. In August 2021, the SC has ordered the razing of these Towers within 3 months of its decision being announced. Sadly, it has been pending for almost a year now.

Finally, the Noida Authority updated the court that the demolition work had begun in February 2022. The demolition took place on August 21. However, on May 17, 2022, the court extended the deadline to August 28, 2022, for the demolition.

“The Supertech Twin Towers demolition case is the result of the absence of specific and expressed consent of the existing flat owners of the project” stated Rahul Hingmire, Founding Partner, Vis Legis Law Practice, Advocates. A multiphase constructed project must be based on the consent of the existing flat owners before proceeding.”

How will the Noida Twin Towers be destroyed:

The area of these towers together captures an estimated 7.5 lakh sq.ft. 3,700 kg of explosives placed in these towers. The source of the explosives is from Palwal in Haryana which contains a mix of dynamite, emulsions, and plastic elements.

Approximately, 1,400 residents living in the area will be shifted. The Movement of the Noida- Greater Noida Expressway near the site will be stop for about 30 minutes. So, we are expecting a no man’s land by 12 pm.

Approx. 35,000 cu. m. of debris will be erect and 7,000 cu. m. of debris is to collect in the basement.

Consequences of Twin Tower Demolition:

With the total number of explosives and scale of demolition, over 5,000 residents of Emerald Court and ATS Village societies are likely to be affected due to demolition. Around 2,500 vehicles will also be halted. Additionally, emergency services will also be made available in that region at the time of the demolition process.

Moreover, a prohibition zone, an area of 450m in front of the towers has been distinct around the twin towers. Hence, no person, transport, or animal will be allowed within the zone, at the time of the demolition. In fact, it will also be a “no-fly zone” for drones.

As Supertech Goes Bankrupt, What a Home Buyer Should do Now?

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As Supertech goes bankrupt, buyers fear further delays in possession of their homes. When a developer goes bankrupt, the first step a buyer should take is to review the contract for options and other clauses.

The real estate company Supertech, which has completed various projects in Noida, Ghaziabad and Greater Noida, was declared bankrupt by the National Company Law Tribunal (NCLT). The developer failed to pay Rs 431 crore to a consortium of banks. The move could affect 11,000 home buyers from the company’s ongoing projects in the NCR region.

How did it all start?

The lawsuit was filed after Union Bank of India sued the RK Arora-promoted company. Since the developer whose two illegal towers have been demolished in Noida has not repaid a loan to a state-run lender. The loan was used for the Eco Village II project in Greater Noida.

Supertech Ltd, which plans to appeal the decision to the National Company Law Appellate Tribunal (NCLAT), said, there are 38,041 units in projects managed by the company, of which 27,111 units have been sold. Mr. Arora said the order will not affect a number of the group’s projects, including Golf Country, Supernova, Azalia, ORB, Hues, Esquare, Valley and Basera, as they are run by another company.

In January 2020, Supertech again applied for a Rs 1,500 crore loan from a newly established state anti-stress fund, to complete 12 ongoing housing projects in Noida, Greater Noida, and Uttar Pradesh. A year later, Union Bank filed an NCLT alleging that Supertech had breached its payment obligations of Rs 431.92 crore.

Demolition of Twin Towers

Things got critical when the Supreme Court on August 31, 2021, ordered the demolition of the twin towers built by Supertech in Noida. Due to illegal construction, aided by cooperation between the developer and the development authority. The court also ordered Supertech to pay Rs 2 crore to the resident welfare association of Emerald Court, due to the problems caused by the construction of the twin towers, which have restricted sunlight and fresh air for existing residents.

The Supreme Court stated that all investments from 633 home buyers who have booked apartments in the Twin Towers must be repaid at an interest rate of 12 percent. 248 home buyers took a quick refund, and around 133 home buyers took apartments in other Supertech projects.

Rejection to Debt settlement

The Union Bank of India has reportedly rejected a one-time debt settlement offer from Supertech. On March 25, 2022, the Bankruptcy Court decided to initiate insolvency proceedings against the developer firm that acted on Union Bank’s plea.

Effect on upcoming projects of Supertech

Projects that will be affected are Eco Village I, II and III in Greater Noida West (or Noida Extension), as well as the Emerald Court Project, which houses the Twin Towers.

Supertech in a statement said it would approach NCLAT to appeal the decision on the grounds that the case belongs to a financial creditor. The company stated that the NCLT request will not affect the construction of ongoing projects or the operation of the company. “We are committed to delivering units to selected allottees. Also we have a strong track record of delivering over 40,000 apartments over the course of the last 7 years. We will continue to deliver flats to our customers as part of our mission in 2022, and we committed to delivering 7,000 units by December 2022.”

Time taken by Supertech insolvency proceedings?

With the onset of insolvency proceedings or Supertech goes bankrupt news, buyers fear further delays in possession of their homes.

Prashant Thakur, Sr. Director & Head – Research, ANAROCK Group said, “Homebuyers who have invested in Supertech properties and waiting for the possession have no choice but to wait for their home until a resolution. Generally, such procedures take a long time before a solution is found. The only positive is that the Supreme Court has previously stated that owners are part of the creditors in such insolvency proceedings.” 

Pankaj Kapoor, MD at Liases Foras said, “Following the example of Unitech and Amprapali, NCLT took over the case and the home buyers recognized as a creditor in the case. Which means that the waiting time for a decision must not exceed one year. Also, since only one company declared insolvent, this should not affect buyers who have invested in projects in other group companies”.

What should home buyers do, as Supertech goes bankrupt?

When a developer goes bankrupt, the first step a buyer should take is to review the contract for options and other clauses.

Aditya Parolia, a partner in law firm PSP Legal said, homebuyers who have invested in Supertech projects need to file their claims with a insolvency resolution specialist until April 8, 2022. They must also provide all documents to the professional. Documents like contract between the developer and the buyer, accounts statement, and correspondence regarding special privileges. 

Kunal Arora, partner at Lakshmikumaran & Sridharan Attorneys, said, however, Supertech Limited’s insolvency proceedings are likely to be detrimental to its current projects. Homebuyers left without legal protection as they also have financial lender status. They are on an equal footing with banks and other lenders under the IBC. As a first step, home buyers should immediately register their claims by submitting the necessary documents to the IRP. This will allow them to participate in the decision-making process.

Home buyers should avoid default on the EMI

Sonam Chandwani, managing partner, KS Legal & Associates, said, home buyers must file a claim to the bankruptcy attorney or insolvency resolution professional. Once the claim approved, the home buyer becomes a creditors committee member and financial lender. Hence, giving them the right to vote on important decisions along with other financial lenders. However, the court has yet to rule on whether home buyers secured or unsecured creditors, and it is time for the courts to do so. Home buyers should keep an eye on the various announcements by checking the Supertech website regularly. They need to work together as a team. Also they should prevent default on the EMI loan, even after their developer goes bankrupt. Sense, this could turn into yet another lawsuit that will only make things worse.

Also read:-

25,000 Home Buyers Impacted as Supertech Goes Bankrupt

UP-RERA plans to launch microsite to hear realtors on procedural delays!