Supertech insolvency: NCLAT stays formation of committee of creditors

Providing some relief to Supertech Ltd, the National Company Law Appellate Tribunal (NCLAT) on Tuesday stayed the formation of the committee of creditors under the insolvency proceedings till April 19 as the real estate developer sought time to negotiate with banks.

During the proceedings before the appellate tribunal, Supertech Ltd's counsel requested for adjourning the matter for a week to enable it to approach the bank for negotiations.

"At his request, let this appeal be listed next Tuesday i.e. on 19.04.2022. Till the next date, IRP shall not constitute the CoC," an NCLAT bench, headed by Chairperson Justice Ashok Bhushan, said.

NCLAT's direction came on a petition filed by Ram Kishor Arora, a director of the suspended board of Supertech Ltd, against the order passed by the National Company Law Tribunal on March 25.

Arora expressed satisfaction over the interim order passed by NCLAT.

According to him, NCLAT has taken into consideration the concerns of all stakeholders, including homebuyers.

On March 25, the Delhi bench of NCLT initiated insolvency proceedings against Supertech Ltd over a petition filed by the Union Bank of India for non-payment of dues worth around Rs 432 crore.

NCLT had also appointed Hitesh Goyal as the Interim Resolution Professional (IRP) superseding the board of Supertech Ltd.

The default pertains to the loan given by the Union Bank of India to Eco Village II project at Greater Noida (West) in Uttar Pradesh, which was being developed at a cost of Rs 1,106.45 crore.

Supertech Ltd has 38,041 flats and out of them, it has delivered 27,111 flats.

As many as 10,930 homes are yet to be delivered and among them, over 70 per cent of construction is complete with respect to over 8,000 homes, Supertech Group Managing Director Mohit Arora said last month.

The formation of CoC is an important step for Corporate Insolvency Resolution Process (CIRP) under IBC (Insolvency & Bankruptcy Code).

Once NCLT initiates CIRP against a debt-ridden firm, it appoints an Interim Resolution Professional (IRP) after suspending the board of the firm.

Article 18 of IBC mandates that it is the duty of the IRP to constitute the committee based on all the claims received against the corporate debtor and the determination of the financial position of the corporate debtor.