NCLAT dismisses Supertech promoter's plea against personal insolvency proceedings

The National Company Law Appellate Tribunal (NCLAT) has dismissed the plea filed by debt-ridden realty firm Supertech former promoter Ram Kishor Arora against personal insolvency proceedings initiated against him.

He had challenged an order by the Delhi bench of the National Company Law Tribunal, which, in February 2025, directed to initiate personal insolvency proceedings against Arora on the plea filed by IFCI and appointed an IRP.

A two-member bench of the appellate insolvency tribunal NCLAT said personal insolvency proceedings could not be defended based on another insolvency proceeding going against Supertech under section 7 of the IBC. It is on the lenders to proceed against both simultaneously or separately.

Section 95 (1) of the Insolvency & Bankruptcy Code allows the creditors to file insolvency proceedings against the personal guarantors.

Arora's counsel submitted the insolvency proceedings initiated against Supertech Ltd under Section 7 is currently sub-judice before the Supreme Court. In this matter, the apex court had, on February 21, 2025, asked the promoters of Supertech and third parties to submit a settlement plan, and the process is already pending before the Supreme Court.

Supertech promoters and other parties are in the process of submitting a plan for construction and settlement.

Rejecting this argument, the NCLAT said: "Be that as it may, we are of the view that the personal insolvency proceedings are not defended on proceedings under Section 7, which are proceedings against the Corporate Debtor (Supertech), the liability of the personal guarantor and the Corporate Debtor to the lenders are co-extensive and it is open for the lenders to proceed against both simultaneously or separately".

Arora's counsel further submitted that the proposal has also been sent to IFCI Bank with an OTS (one-time settlement) Proposal, which is pending consideration.

"We after hearing the Counsel for the Appellant (Supertech), are of the view in so far as the admission of the application under Section 95, that cannot be faulted on the ground of pendency of proceedings under Section 7 against CD," said a NCLAT bench comprising Chairperson Justice Ashok Bhushan and Barun Mitra.

However, the NCLAT said it will be open for Arora to bring before the Resolution Professional settlement with IFCI Bank if any, or any proceedings or any settlement, entered into the proceedings under Section 7, which are pending consideration before the Supreme Court.

The appellate tribunal further said: "It goes without saying that all materials which are brought by the appellant be duly considered by the RP for proceeding further in the personal insolvency proceedings".

Arora was the personal guarantor of the loans taken by Supertech from IFCI.

Earlier, on December 12, 2024, the NCLAT had appointed state-owned NBCC as a project management consultant to complete debt-ridden realty firm Supertech Ltd's 16 real estate projects at a cost of nearly Rs 9,500 crore.

This was challenged before the Supreme Court, which on February 21, 2025, stayed it and directed all stakeholders, including corporate guarantors, Supertech promoter RK Arora and the Yamuna Expressway Industrial Development Authority (Yeida), to submit alternative proposals.

Insolvency proceedings were initiated against Supertech on March 25, 2022.

This was immediately challenged by Arora before the appellate tribunal NCLAT, which on June 10, 2022, modified the order and directed the Committee of Creditors (CoC) to be constituted with regard to Project Eco Village-II only. For other projects, the appellate tribunal directed to be kept as ongoing projects. The construction of all other projects was to continue with the overall supervision of IRP.

The NCLAT order was challenged by the lenders and Indiabulls before the Supreme Court.

The apex court allowed the order passed by the NCLAT on June 10, 2022, to operate. Regarding Eco Village-II, the Supreme Court said the process beyond voting on the Resolution Plan will await a further order.

Earlier this year, on May 31, 2024, the NCLAT directed for a project-wise resolution of Supertech and steps were taken by the IRP. On July 15, 2024, NBCC made a statement showing their interest in the projects of Supertech.