NBCC moves Supreme Court against NCLAT refusal to relax RERA norms for Supertech projects

State-owned NBCC (India) Ltd has moved the Supreme Court against an order of the National Company Law Appellate Tribunal (NCLAT) refusing to exempt it from certain statutory requirements under the Real Estate (Regulation and Development) Act (RERA) while completing 16 stalled housing projects of Supertech Ltd.

A bench headed by Chief Justice Surya Kant, along with Justices Joymalya Bagchi and V. Mohana, issued notice on NBCC’s petition on Monday and listed the matter for hearing on September 24.

NBCC is challenging the NCLAT’s May 22 order, which held that the appellate tribunal had no jurisdiction to waive requirements imposed by a statute. The tribunal said it had already directed the concerned authorities, including real estate regulators, to process and grant the approvals required by NBCC within specified timelines.

NBCC seeks flexibility to move project funds

One of the key relaxations sought by NBCC relates to RERA’s requirement that 70% of money collected from homebuyers be kept in a separate account for each registered project.

NBCC has argued that this restriction makes it difficult to complete Supertech’s projects because the 16 projects are at different stages of construction and have different funding positions. The company wants to use surplus collections from financially stronger projects to fund projects that have run out of money.

The company has also sought relief from the requirement to obtain prior consent from allottees before a majority of the promoter’s rights and liabilities can be transferred or assigned to a third party.

The NCLAT, however, said it could not grant exemptions from statutory provisions.

NBCC plans to start tendering

The Supreme Court notice comes as NBCC has already laid out a timeline for restarting work on the Supertech projects.

At the company’s first-quarter earnings call on August 12, chairman and managing director K.P. Mahadevaswamy said consultants had been appointed for all the Supertech projects and were preparing the quantities of work that remained to be completed.

NBCC expects to float and finalise tenders during the current quarter, with revenue from the Supertech projects expected to start flowing from the following quarter.

Mahadevaswamy said NBCC expects to award contracts worth ₹20,000-25,000 crore during the current financial year, of which around ₹10,000 crore would relate to Supertech.

He attributed the earlier delay in starting work on the Supertech projects to litigation and said the company had now received the required clearance from the Supreme Court to proceed with tendering.

RERA issue remains unresolved

While the Supreme Court has upheld NBCC’s role in completing the Supertech projects, the new petition deals with a different issue — how funds can be used once construction begins.

NBCC’s case before the NCLAT was that the project-wise escrow restrictions under RERA make it difficult to deploy available funds across the 16 projects.

The company has earlier estimated that completing the sold units alone would require fresh investment of around ₹1,700 crore, against projected receivables of about ₹2,200 crore from homebuyers. Depending on the stage of construction, delivery could take about one year for advanced projects and up to three years for projects where work has barely started.

Amrapali model

NBCC has pointed to its experience with the Amrapali projects as a model for completing Supertech’s stalled developments.

In the Amrapali case, the Supreme Court cancelled the developer’s RERA registration and placed the projects under NBCC as project management consultant. On the Supertech projects, however, the company continues to face the statutory restrictions under RERA that it says are making fund deployment difficult.

Mahadevaswamy said on the earnings call that NBCC earns an 8% project management fee and a 1% marketing fee on the Amrapali projects.

50,000 homes affected

Supertech was admitted to insolvency following a petition by Union Bank of India. The 16 projects assigned to NBCC comprise around 50,000 residential units across Noida, Greater Noida and other locations, a substantial number of which have been sold but remain undelivered.

NBCC was brought into the Supertech insolvency process by an NCLAT order of December 12, 2024, which directed the state-owned company to complete the projects in the interest of homebuyers.

The order was subsequently challenged before the Supreme Court. The apex court ultimately upheld NBCC’s appointment, holding that bringing the company in to complete the stalled projects was neither unfair nor contrary to the IBC.

The NCLAT had, in its December 2024 order, also made it clear that NBCC would have to comply with statutory requirements, including RERA.

The Supreme Court’s September 24 hearing will now determine whether NBCC can get the additional flexibility it says is necessary to move funds across projects and speed up construction.

Also See: Unitech homebuyers seek urgent appointment of CMD as projects remain stalled