Lender Consensus Vital as NCLAT Upholds CIRP Admission Against Supertech Township Projects
- REEDLAW
- Jul 30
- 4 min read
Updated: Aug 12
REEDLAW Legal News Network reports that the NCLAT has upheld the admission of Corporate Insolvency Resolution Process (CIRP) against Supertech Township Projects, emphasising that the lack of consensus among financial creditors cannot prevent CIRP initiation when default is established.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench comprising Justice Ashok Bhushan (Chairperson) and Technical Members Mr. Barun Mitra and Mr. Arun Baroka, while adjudicating a Company Appeal, held that where debt and default are clearly established through documentary evidence and are not genuinely disputed, and where multiple settlement proposals lack consensus among lenders and stakeholders, the admission of a Section 7 IBC application cannot be interfered with solely on the basis of ongoing settlement efforts or partial stakeholder support.
The National Company Law Appellate Tribunal (NCLAT) dismissed a company appeal filed by the suspended director of M/s. Supertech Township Projects Ltd., thereby upholding the admission of a Section 7 application by Punjab & Sind Bank. The application, admitted by the Adjudicating Authority on 12.07.2024, was based on the Corporate Debtor’s default in repaying loans exceeding ₹216 Crores. The NCLT had taken note of various acknowledgements of debt by the Corporate Debtor through revival letters, audited balance sheets, and One-Time Settlement (OTS) proposals. Despite the objections raised by the Corporate Debtor concerning limitation and authorisation, the Adjudicating Authority held the application to be complete, within time, and found debt and default duly established. An Interim Resolution Professional (IRP) was accordingly appointed.
During the pendency of the appeal before the NCLAT, the appellant submitted three separate settlement proposals with backing from different investors. However, all proposals were found to be commercially inadequate and were unanimously rejected by the consortium of lenders, including Punjab & Sind Bank. The bank, opposing the appeal, reiterated that the settlement amounts proposed were grossly insufficient against the admitted dues. The Yamuna Expressway Industrial Development Authority (YEIDA), the landowning body, intervened and submitted its claim of over ₹741 Crores, objecting to any settlement without its consent. YEIDA also highlighted the rejection of the appellant’s request under the Zero Policy Scheme due to non-fulfilment of eligibility conditions.
Although a group of homebuyers supported the proposal and sought the Tribunal’s directions to recommence construction under IRP supervision, the majority, including the registered homebuyers’ association and other stakeholders, opposed the plan. They cited years of delay, non-completion, and absence of delivery of possession despite execution of builder-buyer agreements. The Tribunal recorded that the project was substantially incomplete and homebuyers had already suffered considerable prejudice. The appellant’s reliance on the Supreme Court’s judgment in Anand Murti v. Soni Infratech Pvt. Ltd. was held to be misplaced, as in the present case, a significant number of stakeholders opposed the resolution plan, unlike the facts of the cited case.
The NCLAT concluded that the appellant failed to present any viable resolution supported by lenders or regulatory authorities. Given the magnitude of the liabilities, absence of consensus, and lack of financial capacity of the corporate debtor, the Tribunal held that no case for interference was made out. The Tribunal permitted the Corporate Insolvency Resolution Process (CIRP) to proceed under the framework of the IBC and excluded the period from 29.07.2024 till the date of the judgment from the CIRP timeline. The appeal was accordingly dismissed.
Mr. Abhijeet Sinha, Sr. Advocate, with Mr. Siddharth Bhatli, Ms. Lashita Dhingra, Ms. Heena Kochar and Ms. Anvesha Jain, Advocates, represented the Appellant.
Mr. Sanjay Bajaj, Mr. Shivam Takkar and Mr. Rajat Prakash, Advocates, appeared for the Respondent No. 1.
Mr. Akshit Gupta, Advocate, appeared with Mr. Umesh Singhal, IRP, in person for the IRP.
Mr. Amar Gupta and Mr. Pranav Tanwar, Advocates, appeared for the YEIDA.
Mr. Arvind Nayyar, Sr. Advocate with Mr. Mansumyer Singh and Mr. Akshay Joshi, Advocates, appeared for Applicant Homebuyers in IA No. 7378 of 2024.
Mr. Anshul Sharma and Mr. Chaaitanya Jain, Advocates, represented the Intervener-SGCWA.
Mr. Mrinav K. Mandl and Mr. K.V. Jagdishvaran, Advocates, appeared for the Homebuyer Rituraj Sharma.
Mr. Bhaskar Tripathi and Mr. Venamra Mahaseth, Advocates, appeared for the Applicant Homebuyers in IA No. 5972 of 2024.
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