NEW DELHI: By ordering roped in of a new developer to complete the Supertech Supernova project in Noida, which is currently insolvent, and removing the company’s former promoters, the insolvency resolution professional (IRP) and the committee of creditors (CoC), the Supreme Court has revived hopes among lakhs of homebuyers that other frozen housing projects can be rescued in a similar manner.Construction on several projects was halted after insolvency proceedings were initiated.
To secure interest from homebuyers, SC recently sidelined all entities covered under the Insolvency and Bankruptcy Act and appointed a three-member committee to rope in another builder to complete the Supernova project.
The committee should appoint a new developer after inviting proposals and thorough vetting, taking into account the time-bound proposal, track record, experience and financial viability of such new developer. We make it clear that any developer associated or related to the corporate debtor or its former management will not be allowed to participate in the process, said the order passed by the CJI Surya Kant-led bench.The number of homebuyers left in the lurch due to financial mismanagement and money siphoning by builders runs into lakhs. The Center informed Parliament that corporate insolvency resolution processes (CIRP) were initiated against 526 real estate companies between 2016 and March 2025. The problem is acute in NCR.
In an admission that insolvency proceedings in the real estate sector have failed to deliver desired results, Housing and Urban Affairs Minister Manohar Lal Khattar said in August: “The system has failed to improve as envisaged. Otherwise, the system could have been revived, says the NCLT, it is certain that it will never be completed.”
Legal experts and homebuyers welcomed the SC order as a realistic approach to the problem and said the court should follow the same approach in similar cases as appointing an IRP and initiating proceedings under IBC takes years with no guaranteed resolution.
“Based on bad past experiences in resolving failed real estate projects, the SC, by invoking Article 142, has given the committee the powers of the corporate debtor’s board of directors, with the burdensome duty of selecting a bidder to complete the project fairly, thereby ensuring timely completion. The long-drawn process envisaged under the IBC has been short-circuited for good reasons,” said lawyer Govind Jee.
Retired army officer Anil Kumar Singh, a resident of Supertech Ecovillage-3, who fought for homebuyers before the IRP, said, “I realized that the IRP is a drain on limited resources. In both Jaypee and Supertech projects, homebuyers alternated between the IRP and the builder.”
SC not only allowed the entry of a new builder to complete the Supernova project, but also prioritized the interests of homebuyers over those of banks and the landowners agency, Noida Authority, by ruling that they would not receive any amount until the construction was completed.
Lawyer Chandrachur Bhattacharyya alleged that builders are misusing IBC provisions to avoid their responsibility. “IBC has become a tool for erring promoters and directors to first indulge in improper conduct and then escape liability and punishment for the same by resorting to IBC. For example, provisions like Section 14 moratorium against the corporate debtor brings to a standstill all pending cases against the corporate debtor, causing a lot of inconvenience to home buyers,” he said.
Abhay Upadhyay, president of FPCE, a pan-India homebuyers’ body, said, “The SC order in the Supernova case once again shows how IBC, like RERA, has failed to deliver justice in the real estate space. The bigger question is why projects are being approved without dues being paid and why laws that work in other sectors are collapsing only in the real estate sector. Unless accountability is fixed, we will continue to see committee after committee without any real reform.”
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