Homebuyers at 18 unfinished Supertech projects stuck in limbo: ‘Govt failed to act’

The Enforcement Directorate’s Tuesday move to take into custody Supertech Limited’s chairman RK Arora in connection with a money laundering case, has prompted another plea for help from thousands of homebuyers who have bought flats in 18 realty projects of the company that are stuck.

“Arresting Supertech’s chairman for some days will not deliver justice to us nor will we get delivery of our units . The big question is why the local authorities or the Uttar Pradesh government failed to act on time, take action against the realtor,” said BN Gupta, a buyer of a flat in Supertech Upcountry .Also Read | Supertech chair named directors to shell firms to siphon off funds: ED
At least 80% on this project is complete, but the company cited a funds crunch as the reason for its inability to complete work. Then there are other projects where buyers have got possession of partially-completed flats but are unable to register them because the developer hasn’t made mandatory payments to local development agencies. The split is almost equal — around 10000 buyers are affected by incomplete projects and another 10000 by their inability to register flats.

And in many cases there is a link between the two kinds of problems.At least 638 crore collected from homebuyers and borrowed from the banks were diverted by Supertech Group and its chairman Ram Kishor Arora to buy properties in Gurugram at an inflated prices instead of completing existing projects in Noida, ED said while producing Arora before a Delhi court on Wednesday. Arora was arrested by ED in a money laundering case on Tuesday.

Supertech’s biggest affordable housing project, around 10,000 flats in Ecoville, Greater Noida, falls in the first category. “We booked a flat in Ecovillage 10 years ago. We demand that the UP government and the (NOIDA) authority step in now and resolve the issue,” said Naveen Kumar, a buyer.

In many cases, the company hasn’t even paid the state development authorities for the land for these incomplete projects. Many realtors including Supertech Limited got the land by paying 10% of the cost with the remaining 90% to be paid in seven years. The land owning authorities have now started levying penal interest up to 25% — which only increases the developers’ financial distress. .

Most of the realtors in Gautam Budh Nagar district are facing allegations that they collected the funds from the buyers and diverted those funds to buy more land in other cities, said officials of the Greater Noida authority.

“Banks and the housing financing agencies have refused to provide the last mile funding to the realtors in Noida as they have become defaulters. The government is a mute spectator ; it has not waived penal interest or brought any suitable scheme to address this grave crisis that the realty sector faces today,” said Shailendra Sharma, a Noida-based independent realty consultant.

On May 11, in an interim order, the Supreme Court allowed Supertech Limited to infuse the funds in delayed realty projects and work with the national company law tribunal appointed resolution professional to make sure the unfinished projects are completed . This came after RK Arora assured the court (through his lawyers) that the flats would be delivered in the next two to three years.

“With RK Arora in ED custody, how will funds be arranged and who will ensure delivery of the incomplete projects? ” said Ajay Kumar, a buyer of a flat in Supertech Romano, which has been delayed by seven years.

Supertech Limited said, “We have delivered 19,990 units so far and there are 27476 undelivered units in all our projects located in different cities. There are 13932 units which are unsold,” said a Supertech spokesperson.

“We are committed to deliver units in all our projects. Supertech Group had arranged the adequate funds to ensure delivery to all home-buyers and we are working in that direction,” this person added.

Ritu Maheshwari chief executive officer for the Noida and the Greater Noida authority refused to comment on the issue. UP real estate regulatory authority chairman Rajive Kumar was also unavailable for a comment.