Supreme Court Upholds NBCC Takeover of Supertech's 16 Unfinished Housing Projects
In a landmark decision bringing relief to thousands of homebuyers, the Supreme Court of India has upheld the National Company Law Appellate Tribunal (NCLAT) order from December 2024. This order entrusts the construction and completion of 16 unfinished housing projects by the beleaguered real estate giant Supertech Limited to the National Buildings Construction Corporation (NBCC).
Court's Ruling and Rationale
A bench comprising Chief Justice of India Surya Kant and Justice Joymalya Bagchi invoked the court's extraordinary powers under Article 142 of the Constitution. The bench stated, "We find that the order passed by the NCLAT on December 12, 2024, in bringing the NBCC on record for the completion of the pending housing projects is neither unfair nor contrary to the provisions of the Insolvency and Bankruptcy Code (IBC)."
The court emphasized that its foremost priority is to protect the interests of homebuyers, many of whom have been waiting for their booked flats for nearly two decades. The bench noted that Supertech had booked over 50,000 homes for delivery between 2010 and 2012, but a significant number of these projects have remained incomplete, causing immense distress to buyers.
Expedited Completion and Committee Cooperation
The Supreme Court directed NBCC to complete the construction work expeditiously, as recommended by an expert committee established by the NCLAT. It further instructed the committee to cooperate fully with NBCC to ensure smooth and timely project completion.
To prevent any delays, the court also issued directives to tribunals and high courts, instructing them not to pass any orders that could stall work on these projects. Additionally, the court mandated that all apartments must retain all promised facilities, including water supply, electricity, and drainage systems, as originally committed to homebuyers.
Financial Implications and Creditor Concerns
Addressing financial aspects, the Supreme Court clarified that the concerns of creditors would be addressed only after the flats are handed over to the homebuyers. The bench made it clear that creditors would have to accept a haircut deemed "just and equitable" by the insolvency tribunals.
In proceedings under the IBC 2016, a haircut refers to the difference in the amount that creditors must forgo from their claims when the borrower company is unable to repay in full. This decision underscores the court's commitment to prioritizing consumer rights over financial recoveries in such cases.
Background and Legal Proceedings
The Supreme Court's ruling follows a series of legal developments. In May 2023, the court had refused to interfere with the NCLAT's order adopting a project-wise resolution for Supertech. The tribunal had admitted the company to insolvency in March 2022 due to a default of Rs 431 crore to a consortium of banks led by the Union Bank of India.
Earlier, on February 21, 2025, the Supreme Court had issued notices on appeals challenging the NCLAT order and stayed the order temporarily. The court had indicated it would examine whether the tribunal was correct in awarding construction work to NBCC without following the prescribed procedures under the IBC. The recent verdict resolves this examination in favor of the NCLAT's decision.
This ruling marks a significant step towards resolving one of India's major real estate insolvency cases, offering hope to countless homebuyers awaiting their dream homes and setting a precedent for handling similar disputes in the future.
