As the twin towers in Noida were razed to the ground in a controlled blast on Sunday, can the buyers ever recover from their losses? Or will they have to pay the price for the illegal activities of the builder and the authorities?
In the biggest demolition of its kind seen in the country, the Supertech twin towers in Noida, Uttar Pradesh came crashing down to rubble in a matter of few seconds, on August 28, 2022. The twin towers comprising Apex (32 floors) and Ceyane (29 floors), taller than the Qutub Minar in Delhi, were 100 meters tall, and were destroyed with explosives, as part of a planned demolition plan.
This move came after a long-drawn legal battle of almost nine years, where the Supreme Court finally passed the verdict to demolish the building within three months. As there were illegalities found in approvals, some officials faced action as well.
The approximate cost of construction of the twin towers was estimated to be less than Rs. 100 crore in 2014. At present, it is estimated to be over Rs. 300 crore.
But what happens to the buyers now who had invested in the property?
Out of the total 600 buyers who had purchased flats in these two towers, all but 59 have either received a refund or have swapped flats for other projects of the builder.
The Supreme Court has promised that it would get the homebuyers refunded the money paid to the builder. A Bench of Justices DY Chandrachud, AS Bopanna, and JB Pardiwala said that the homebuyers would get their total refund, but for the time being, they would be paid out of the Rs 1 crore, which would be deposited with the Interim Resolution Professional (IRP) by September 30.
The Bench said that it would ensure that the homebuyers of the twin towers get their refund in compliance with the August 31, 2021 order of the court.
“In the meantime, in order to ensure that the homebuyers who are covered by the judgment of this court get some refund of their outstanding dues, we direct the IRP to deposit an amount of Rs. 1 crore with the registry of this court on or before September 30,”it said.
The Bench said that amicus curiae Gaurav Agarwal will sit together with the IRP in the first week of October and jointly work out the outstanding dues of the homebuyers, and submit the details before the next date of hearing, so that some disbursement can be made to the hassled homebuyers.
“The amicus and the IRP would jointly work out the outstanding dues of the homebuyers, who have approached the court, and submit their details on the next date of listing, so that directions can be issued for the disbursement of the fund,” it said.
According to industry experts, a lot of money that has already been wasted belongs to the banks and the buyers, and it might not be possible to recover it, as the builder’s case is now in the National Company Law Tribunal (NCLT) this year.
“According to the orders of the SC, the buyers who have booked their homes in the twin towers that were demolished, are to receive a refund of their amounts with 12 per cent interest. The order that was passed in 2021 is not fully complied with, and hence, a number of homebuyers remain out-of-pocket for their hard-earned money,” says Mani Gupta, partner, Sarthak Associates and Solicitors.
The commencement of insolvency proceedings against Supertech in April 2022, further muddied the waters.
“The SC had ordered the homebuyers, who were yet to receive refund, to file their claim before the insolvency resolution professional. However, since then, the NCLAT has ordered that the insolvency proceedings against Supertech shall be limited to one project only,” says Gupta.
The IRP has also been directed to deposit a sum of Rs. 1 crore with the Supreme Court Registry by August 30. According to legal experts, in case further directions of the apex court are violated, there is a window for the homebuyers to reinitiate contempt proceedings against the builder in the Supreme Court.
“Moreover, for the losses that cannot be compensated through the interest, the homebuyers can consider a class action suit under the consumer protection law to claim for such damages. This could, however, be an uncharted territory given the fact that the refund order has been passed by the SC itself, and it may be argued by Supertech that the SC order is a comprehensive order, thereby not leaving scope for any other form of damage,” adds Gupta.