Noida towers: Refund buyers or face jail, Supreme Court tells Supertech

The Supreme Court on Wednesday warned the realty major Supertech that its directors will be sent to jail for not complying with the court orders to demolish the 40-storey twin towers of its Emerald Court project in Noida, and defaulting on refunding the money to the affected homebuyers.

The two towers were declared illegal by the Supreme Court on August 31, 2021, and the apex court had given three months to the company to demolish the two towers. The court also directed the Noida authority to take assistance from Central Building Research Institute (CBRI), Roorkee, in safely accomplishing this task.

With more than four months having elapsed since the order and more than 250 homebuyers yet to get their refund with interest, the bench of justices Dhananjaya Y Chandrachud and AS Bopanna took a strict view against Supertech and said, “We are going to send your directors to jail. You are playing truant with the Supreme Court.”

The homebuyers informed the court that the real estate firm was charging an interest over the refund which was not contemplated in the judgment. Further, the firm agreed to deposit the money in instalments after signing an agreement that would absolve Supertech of all future liabilities, and bar the homebuyers from seeking further remedy from the top court.

“We find you (Supertech) are finding all kinds of ruses to avert compliance of our orders. Make sure the payments are made till Monday or else there will be serious consequences,” the bench said.

Supertech’s counsel, senior advocate Parag Tripathi told the court that two firms – Edifice Engineering and Genesis Engineering — were shortlisted for carrying out the demolition and clearing the debris. He said that the plans were forwarded to the Noida authority and the same had to be finalized by the CBRI.

Supertech wanted to make CBRI a party in the Court proceedings but the request was turned down by the court after the Noida authority counsel Ravindra Kumar informed the court that the real estate firm was to be blamed for delaying the implementation of the court’s order. “Initially, Supertech submitted the proposal of Edifice Engineering and the firm made a presentation in which CBRI representative was present. For final approval, we sent it to CBRI. Then, Supertech submitted a second plan by Genesis Engineering on January 9 . We forwarded the same to CBRI on Tuesday.”

The court told Kumar, “We will not hear CBRI. Let the Noida authority take a decision and make a statement on Monday.”

Supertech said it was agreeable to either of the two agencies for carrying out the demolition.

Homebuyers have also filed contempt petitions against Supertech for failing to abide by the court’s August 31 order.

The August judgment said, “The appellant (Supertech) shall within a period of two months refund to all existing flat purchasers in Apex and Ceyane (Towers 16 and 17), other than those to whom refunds have already been made, all the amounts invested for the allotted flats together with interest at the rate of 12% per annum payable with effect from the date of the respective deposits until the date of refund.”

Advocate Abraham C Mathews, representing some of the affected homebuyers said, “The judgment awarded interest to be paid till the date of actual payment by Supertech. However, they have made calculations on interest to be paid only till the date of judgment.”

He added that Supertech has also made impermissible deductions in amounts calculated as payable to the homebuyers, by claiming interest on amounts paid as return of investment (ROI) previously. “The court has not permitted any such deduction,” he said.

Earlier, the court resolved the difference in the amounts demanded by the homebuyers and Supertech by appointing advocate Gaurav Agrawal as amicus curiae who formulated a mutually acceptable figure that was approved by the court’s judgment.

Abhishek A Rastogi, Partner at Khaitan & Co. said if the demolition is due to the fault of the builder, then certainly the home buyers deserve expedited refunds. “The proceedings against such defaults to expedite refund to homebuyers will certainly boost confidence of consumers and would help the genuine real estate businesses in the long run,” he said.

The two towers facing demolition have 915 flats of which 633 were booked. Of them, only 252 flat buyers remained as 133 homebuyers re-invested in other Supertech projects while 248 took a refund.

The order to demolish the towers came on a petition moved by the Emerald Court Owner Resident Welfare Association objecting to the construction of the two towers on an area marked as ‘green area’ in the brochure issued to them at the time of purchase. Also, the distance between the two towers was not in accordance with the minimum distance criteria under the relevant by-laws.

Following the SC decision, Supertech made a last-ditch effort to save its towers by proposing to partially demolish 224 apartments in tower T-17 along with the community area at the ground floor without touching the other tower T-16.

The top court dismissed this application on October 4, as it said that the only recourse available to Supertech was to file a review petition and not seek modification of its order through an application.

Subsequently, Supertech filed a review petition which is yet to be considered by the top court. The UP government has also ordered a probe by a special investigation team (SIT) to examine the nexus between the builder and bureaucrats that led to approval for the two illegal towers.