NEW DELHI: The Supreme Court’s recent order to appoint a new developer for the Supertech Supernova project in Noida, which is currently undergoing insolvency proceedings, has sparked renewed hope for countless homebuyers awaiting progress on stalled housing projects.
As the construction of several projects has come to a halt during the insolvency process, the Supreme Court has stepped in to protect homebuyers’ interests by appointing a three-member committee to select another builder for the Supernova project, putting all entities under the Insolvency and Bankruptcy Code aside.
The committee is tasked with appointing a new developer by evaluating proposals based on track record, experience, and financial viability, ensuring that no developers connected to the previous management can participate, according to the order issued by the bench led by CJI Surya Kant.
The plight of homebuyers affected by builders’ financial mismanagement has reached alarming levels, with the Centre informing Parliament that Corporate Insolvency Resolution Processes (CIRP) were initiated against 526 real estate companies from 2016 to March 2025, especially in the NCR region.
In August, housing and urban affairs minister Manohar Lal Khattar acknowledged the shortcomings of the insolvency process in the real estate sector, stating, “The NCLT has not improved the system as intended. If a project has potential for revival but enters NCLT, it’s unlikely to be completed.”
Legal experts and homebuyers have welcomed the Supreme Court’s ruling as a pragmatic approach, urging similar actions in future cases because the current IBC processes often take years and lack guarantees.
Advocate Govind Jee noted that by invoking Article 142, the Supreme Court has empowered the committee with the authority typically held by the board of directors of the corporate debtor, requiring them to ensure a fair selection of a bidder to complete the project on time.
Retired army officer Anil Kumar Singh, who has been advocating for homebuyers at Supertech Ecovillage-3, remarked on the inefficiencies of the IRP, highlighting how homebuyers have been left caught between the IRP and builders in other cases as well.
The Supreme Court not only permitted a new builder to take over the Supernova project but also prioritized homebuyers’ rights over banks and the Noida Authority, ruling that these entities would receive no payments until construction is finished.
Advocate Chandrachur Bhattacharyya criticized builders for misusing IBC provisions to evade accountability. “The IBC has become a mechanism for errant promoters to escape responsibility and litigation against them, causing significant inconvenience to homebuyers,” he stated.
Abhay Upadhyay, president of FPCE, a nationwide homebuyers’ organization, expressed concern that the SC’s order reflects ongoing failures in the real estate sector, questioning why projects are approved with outstanding dues and why effective laws seem ineffective in this industry. He emphasized the need for accountability to avoid repetitive committee formations without substantive reforms.
