The National Company Law Appellate Tribunal (NCLAT) on Tuesday gave Supertech one more opportunity to settle its dispute with the Union Bank of India that dragged the company to the insolvency court even as the lender rejected the realty firm’s latest one-time settlement (OTS) offer.
Union Bank of India took Supertech to the insolvency court after the real estate developer failed to pay its debt since July 2019. The amount of default, as of January 2021, stood at Rs 432 crore.
The National Company Law Tribunal (NCLT) had on March 25 approved Union Bank’s application for initiation of the corporate insolvency resolution process (CIRP) against Supertech. Challenging the order, one of the promoters of Supertech moved the NCLAT.
On April 12, paying heed to Supertech’s request, the NCLAT gave the real estate firm a week to “enable the company to approach the bank again”. When the case came up for hearing on Tuesday, Supertech’s advocate said the bank has yet again turned down its one-time settlement (OTS) offer that promised to pay up the entire bad loan (NPA).
Alok Kumar, advocate on behalf of the Union Bank of India, said the offer has been rejected on various grounds as it did not mention paying any upfront amount and the tenure of repayment was also rather lengthy at 24 months. Also, the company did not mention any “concrete source of funds” for its promised repayment as per the latest OTS, the fifth in all so far.
On top of it, he said, the developer had failed to keep a similar OTS promise made in 2019.
Senior advocate Arun Kathpalia, appearing on behalf of Supertech, said the company would offer some upfront payment to the bank in its next OTS offer. The company, he said, wants to “sit with the bank again with the idea of settling the matter.” He said while Union Bank of India is a lender to one among 28 ongoing projects by the company, however, the insolvency process against that one company will have a bearing on all other projects.
Kathpalia requested the NCLAT bench not to tinker with the interim order of April 12, under which the appellate tribunal stayed the formation of the committee of creditors (CoC) till further hearing, which the appellate tribunal obliged. The matter has been scheduled for further hearing on May 2.
Between 2013 and 2016, Supertech availed two credit facilities, totalling Rs 250 crore, from Union Bank to part-finance a group housing project, Eco Village -II, in Greater Noida.
Supertech failed to make timely repayment and subsequently, the Union Bank of India declared it a non-performing asset (NPA). Notice was also sent under the SARFAESI Act in April 2019.
