Supreme Court Empowers NBCC to Finish Supertech Projects, Rings Fence Around Homebuyers’ Rights

Supreme Court Empowers NBCC to Finish Supertech Projects, Rings Fence Around Homebuyers’ Rights

Introduction

The Supreme Court of India has upheld an order of the National Company Law Appellate Tribunal (NCLAT) directing the National Buildings Construction Corporation Limited (NBCC) to take over and complete 16 stalled housing projects of debt-ridden real estate developer Supertech Limited. Exercising its extraordinary powers under Article 142 of the Constitution, the Court held that the NCLAT’s directions were neither unfair nor contrary to the Insolvency and Bankruptcy Code, 2016 (IBC), and were necessary to secure complete justice for thousands of long-suffering homebuyers.

Factual Background

Supertech Limited, a prominent real estate developer, had launched multiple housing projects between 2010 and 2012, during which it reportedly booked around 51,000 homes from buyers across various projects. Over time, severe financial distress led to prolonged construction delays, leaving thousands of homebuyers waiting for possession for over a decade.

Supertech eventually entered insolvency proceedings under the IBC. Given the scale of delay and the number of affected allottees, homebuyers consistently urged courts and tribunals to prioritise completion of homes over recovery of dues by financial and operational creditors.

Procedural Background

During the corporate insolvency resolution process of Supertech, the NCLAT, by an order dated December 12, 2024, directed that NBCC, a state-owned construction entity, be brought on record to take over and complete 16 pending housing projects. An expert committee was also constituted to assist and oversee the completion process.

The NCLAT’s decision was challenged before the Supreme Court. In the interim, on February 21, 2025, the Supreme Court had stayed an order appointing NBCC as the project management consultant at an estimated cost of nearly ₹9,500 crore. The present judgment finally adjudicated the validity of the NCLAT’s approach.

Issues

1. Whether the NCLAT’s order directing NBCC to complete Supertech’s stalled housing projects was unfair or contrary to the Insolvency and Bankruptcy Code, 2016.

2. Whether the Supreme Court could invoke its powers under Article 142 to prioritise completion of housing projects over the claims of financial and operational creditors.

3. Whether tribunals and High Courts should be restrained from passing orders that could stall construction work undertaken for the benefit of homebuyers.

Contentions of the Parties

The affected homebuyers supported the NCLAT’s decision, contending that their right to receive completed homes should take precedence, particularly after waiting for more than a decade. They argued that insolvency proceedings should not result in permanent deprivation of shelter for genuine allottees.

On the other hand, concerns were raised regarding the interests of financial and operational creditors, who argued that the takeover and completion plan could significantly dilute their recoveries under the insolvency framework.

Reasoning and Analysis

The Bench comprising Chief Justice of India Surya Kant and Justice Joymalya Bagchi held that the NCLAT’s approach was aligned with the underlying objectives of the IBC when applied to real estate insolvencies involving large numbers of homebuyers. The Court observed that the primary interest of justice lay in ensuring delivery of fully constructed and habitable homes, rather than liquidating assets or prioritising creditor recoveries at the cost of allottees.

The Court emphasised that financial and operational creditors could only have their dues addressed meaningfully after the completion and handover of houses, complete with assured civic amenities such as water, electricity, sewage connections, roads and parks. It clarified that creditors would have to accept haircuts as determined to be just and equitable by the NCLT and NCLAT.

Invoking Article 142, the Court noted that its constitutional mandate to do “complete justice” justified overriding procedural obstacles and preventing parallel proceedings that could derail the completion of projects. It expressly restrained all tribunals and High Courts from passing orders that might stall NBCC’s construction work.

Decision

The Supreme Court upheld the NCLAT’s December 12, 2024 order and directed NBCC to expeditiously complete Supertech’s 16 stalled housing projects in accordance with the roadmap laid down by the expert committee. The committee was directed to continue supporting NBCC during execution.

The Court disposed of the pending pleas while granting liberty to the parties to approach the Supreme Court again if any future developments threatened to impede the completion of the projects.