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Realty firm Supertech's financial creditor Union Bank of India has asked the insolvency-bound company to deposit 75 crore as upfront cash for considering one-time settlement (OTS) of dues.

During the proceedings of the insolvency appellate tribunal NCLAT, counsel representing Supertech informed that the realty firm had several rounds of discussions with Union Bank of India.

The realty firm had offered to make an upfront payment of 10 crore with 10 crore on acceptance of OTS, however, the public sector lender asked to deposit 75 crore as a condition to consider for settlement.

"It is submitted that the Appellant (Supertech) has offered to make upfront payment of 10 crore with 10 crore on acceptance of OTS and 55 crore for exclusive security however the Bank has asked to deposit 75 crore as upfront to consider the OTS," the NCLAT recorded in its order dated May 17.

Union Bank of India's counsel submitted that as per policy of the Bank, it is fully entitled to ask for upfront 15-20% of the dues.

The National Company Law Appellate Tribunal (NCLAT) has asked the public sector lender to file a copy of the said policy.

"Learned Counsel for the Bank may file the copy of the Policy along with the Judgment of the Hon’ble Supreme Court on which reliance is placed in support of his submission before the date fixed," said a two member NCLAT bench headed by Chairperson Justice Ashok Bhushan.

Meanwhile, home-buyers of Supertech also filed an intervention in the matter through their counsel Piyush Singh over refund in Twin Tower case.

"We make it clear that in this Appeal there is no issue regarding the Twin Tower of Supretech," said NCLAT.

NCLAT had directed to list the appeal on May 23 and said its interim order staying formation of Committee of Creditors (CoC) would continue till then.

However, it also clarified that the interim resolution professional is free to take other steps.

"As prayed, list this Appeal on May 23, 2022. Interim order to continue till then. We have already stayed the Constitution of CoC however there is no stay of the other steps to be taken by the IRP," it said.

NCLAT’s direction came, while hearing a petition filed by Ram Kishor Arora, a director of the suspended board of Supertech Ltd, against the order passed by the National Company Law Tribunal on March 25.

On March 25, the Delhi bench of NCLT initiated insolvency proceedings against Supertech Ltd over a petition filed by the Union Bank of India for non-payment of dues of around 432 crore.

NCLT had also appointed Hitesh Goyal as the Interim Resolution Professional (IRP) superseding the board of Supertech Ltd.

However, NCLAT had stayed the formation of the committee of creditors under the insolvency proceedings after the realty firm requested for time to enable it to approach the bank for negotiations.

The default pertains to the loan given by the Union Bank of India to Eco Village II project at Greater Noida (West) in Uttar Pradesh, which was being developed at a cost of 1,106.45 crore.

The formation of CoC is an important step for the Corporate Insolvency Resolution Process (CIRP) under IBC (Insolvency & Bankruptcy Code).

Once NCLT initiates CIRP against a debt-ridden firm, it appoints an Interim Resolution Professional (IRP) after suspending the board of the firm.

Article 18 of IBC mandates that it is the duty of the IRP to constitute the committee based on all the claims received against the corporate debtor and the determination of the financial position of the corporate debtor.

Meanwhile, the erstwhile management of realty firm Supertech Ltd Wednesday informed the Supreme Court that it has submitted a settlement proposal with the financial creditor Union Bank of India to resolve the dispute over payment of dues with the NCLAT.

A bench of Justices DY Chandrachud, Surya Kant, and PS Narasimha was told by senior advocate S Ganesh, appearing for erstwhile management, that they have submitted the proposal and urged the court to direct the NCLAT to consider it.

The bench said, “You have placed it. They (NCLAT) will consider it. We should not be issuing any such direction for consideration. It is not appropriate for us to direct them".

At the outset, amicus curiae advocate Gaurav Agrawal informed the court that the matter before the NCLAT was listed for hearing on May 17 but it was adjourned.

Counsel appearing for Interim Resolution Professional (IRP) which has been appointed by NCLT submitted that erstwhile management had issued cheques to several home buyers, which have now been dishonoured due to insufficient funds and they have now started instituting legal proceedings against him.

The bench said it needs to protect the IRP and directed that no such proceedings be initiated against him.

A counsel for home buyers said that the legal proceedings for cheque bounce are barred by limitation and if they do not initiate such proceedings within a stipulated time, they will lose the remedy under the Negotiable Instrument Act.

The bench, then exercising its power under Article 142 of the Constitution extended the limitation period, till further orders.

Earlier, on May 6, the embattled real estate major Supertech Ltd had informed the top court that it is in talks with the financial creditor Union Bank of India to resolve the dispute over the payment of dues.

The top court was also informed by Agrawal that the company Supertech Ltd does not have sufficient amount in its account to make the refund to home buyers of the to be razed twin towers in the Emerald Court project in Noida.

The bench had told Agrawal that a way out had to be found to pay the home buyers of the Twin Towers as per the orders of the court.

On April 4, the top court said it will protect the interest of home buyers of 40 storey twin-towers of Emerald Court project of real estate developer Supertech Ltd, which has been now declared bankrupt by NCLT, and directed them to file by April 15 their claims for refund of payments.

The realty firm had informed the top court that it will be filing an appeal against the order of the National Company Law Tribunal (NCLT) declaring it bankrupt on a plea filed by the Union Bank of India for non-payment of around 432 crore worth of dues.

The amicus had earlier said that there were a total of 711 home buyers of the twin towers out of which the company had settled the claim of 652 home buyers.

On February 28, the NOIDA authority informed the top court that the work for the demolition of Supertech’s twin 40-storey towers in its Emerald Court project, which have been held illegal for a violation of norms, has commenced and will be razed completely.

The authority in the status report said that after the demolition of these massive structures, the entire debris will be cleared of the site by August 22.

The top court had asked all the stakeholders including NOIDA and Supertech Ltd to strictly abide by the timeline given in the status report and listed the matter for further hearing on May 17.

On August 31 last year, the top court had ordered the demolition of Supertech Ltd's twin 40-storey towers under construction within three months for violation of building norms in "collusion" with NOIDA officials, holding that illegal construction has to be dealt with strictly to ensure compliance with the rule of law.

The NOIDA authority had received a rap on its knuckles as the top court pointed out multiple incidents of collusion of its officials with Supertech Ltd in the Emerald Court project and violations of norms by the realty major in the construction of the twin towers.

The top court had directed that the entire amount of home buyers be refunded with 12 percent interest from the time of the booking and the RWA of Emerald Court project be paid 2 crore for the harassment caused due to the construction of the twin towers, which would have blocked sunlight and fresh air to the existing residents of the housing project adjoining the national capital.

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