Supreme Court Upholds NCLAT Order Entrusting NBCC To Complete Stalled Supertech Housing Projects

The Supreme Court recently dismissed a batch of appeals challenging directions issued by the National Company Law Appellate Tribunal (NCLAT) to involve NBCC (India) Ltd for completion of stalled housing projects of Supertech Ltd, declining to interfere with the appellate tribunal's approach.

A bench of Chief Justice Surya Kant and Justice Joymalya Bagchi held that the NCLAT's decision in evolving a mechanism to protect the interests of homebuyers and ensure completion of long-delayed projects did not warrant any interference.

“Such a recourse adopted by the NCLAT does not warrant any interference by this Court, especially when an equitable, fair, and transparent judicial order, which rightly deserves protection under the umbrella of Article 142 of the Constitution, is in place, given the peculiar facts and circumstances of this case,” the court observed.

The dispute has its origin in insolvency proceedings initiated against Supertech after Union Bank of India filed an application under the Insolvency and Bankruptcy Code. The petition was admitted by the National Company Law Tribunal, New Delhi Bench, on March 25, 2022.

Supertech had launched several residential and commercial projects in different years, mostly between 2010 and 2012, across Noida, Greater Noida, the Yamuna Expressway, Gurugram and other regions. Due to delays and financial stress, a large number of projects remained incomplete, leaving thousands of homebuyers without possession despite having paid substantial amounts.

While hearing appeals against the insolvency admission, the NCLAT considered an interim application (IA No. 6557 of 2024) focused on finding a viable mechanism for completion of 16 stalled housing projects, except Doon Square. Homebuyers suggested that NBCC, a Government of India enterprise, be entrusted with the task.

Accepting the proposal, the NCLAT on December 12, 2024, directed NBCC to take over construction, prescribing timelines for commencement from May 1, 2025, mandating project-wise accounts, regulating funding flows, and constituting an Apex Court Committee along with project-wise Court Committees. The directions also protected existing allottees from any escalation of costs beyond their contractual obligations.

Supertech's management, certain creditors and statutory authorities challenged the order, contending that the NCLAT lacked jurisdiction to bring in a third-party developer and that the directions were contrary to the insolvency framework.

Rejecting these objections, the Supreme Court held that the NCLAT's approach was driven by the need to safeguard homebuyers who had been waiting for possession for over two decades. It found that the directions were equitable, fair and transparent, and did not warrant interference.

The court further directed that no court or tribunal should pass interim orders halting construction by NBCC, while clarifying that claims of creditors and statutory authorities would be considered separately at a later stage.

“To ensure there is no impediment to the completion of the housing projects, it is directed that no Tribunal or Court, including the High Court, shall pass any interim order or directions stopping any project from being commenced by NBCC,” the court said.

While dismissing the appeals, the Supreme Court granted homebuyers and other stakeholders liberty to approach the NCLT or NCLAT and seek appropriate directions.

It also appointed Senior Advocate Rajiv Jain and Advocate Amarendra Kumar as amicus curiae to assist the tribunal and submit recommendations to the Apex Committee or the Tribunal, as the case may be, in facilitating implementation of the directions.