SC Order on Supernova Brings Relief to Stalled Project Homebuyers

• SC allows a new developer to complete the Supernova project

• Homebuyers’ interests given priority over banks and authorities

• Order raises hopes for similar relief in other stalled projects

The SC order on Supernova has emerged as a major relief for homebuyers struggling with stalled housing projects, particularly those trapped in insolvency proceedings. By directing the appointment of a new developer to complete the Supertech Supernova project in Noida, the Supreme Court has offered a rare example of judicial intervention aimed squarely at protecting buyers’ interests.

In a significant move, the apex court set aside the existing insolvency framework governing the project. It removed the erstwhile promoters, the insolvency resolution professional (IRP), and the committee of creditors (CoC), and instead constituted a three-member committee to oversee the completion of the project. This committee has been empowered to invite bids, vet developers, and ensure time-bound delivery based on financial strength, experience, and past track record.

Importantly, the court made it clear that no developer associated with the previous management or the corporate debtor will be allowed to participate in the bidding process. The order was passed by a bench led by Chief Justice of India Surya Kant, underlining the court’s intent to prevent repeat failures caused by mismanagement.

Construction across several housing projects has come to a standstill after insolvency proceedings were initiated under the Insolvency and Bankruptcy Code (IBC). According to data shared by the Centre in Parliament, Corporate Insolvency Resolution Processes (CIRP) were initiated against 526 real estate companies between 2016 and March 2025, with the problem particularly severe in the National Capital Region (NCR).

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Acknowledging the shortcomings of the existing system, Union Housing and Urban Affairs Minister Manohar Lal Khattar had earlier admitted that insolvency proceedings have failed to revive stalled projects. He noted that once a real estate project enters the NCLT process, its completion often becomes unlikely.

Legal experts believe the SC order on Supernova reflects a more pragmatic approach. Advocate Govind Jee said the court, by invoking Article 142, has bypassed the lengthy IBC process and vested the committee with powers equivalent to a board of directors, ensuring faster decision-making and accountability.

Homebuyers have welcomed the ruling as well. Retired Army officer Anil Kumar Singh, a resident of Supertech Ecovillage-3, said the IRP system drains already scarce resources, leaving buyers caught between developers and insolvency officials without real progress on the ground.

Crucially, the Supreme Court also ruled that banks and the Noida Authority will not receive any payment until construction is completed, giving clear precedence to homebuyers’ interests. This marks a departure from past cases where financial creditors often took priority.

However, concerns remain. Advocate Chandrachur Bhattacharyya argued that errant builders misuse IBC provisions to escape accountability, while Abhay Upadhyay, president of the Forum for People’s Collective Efforts (FPCE), said the Supernova case once again exposes how both IBC and RERA have fallen short in delivering justice to homebuyers.

While the ruling does not fix all systemic issues, the SC order on Supernova has undeniably restored confidence among buyers that stalled projects can still be revived—if accountability, timelines, and buyer interests are placed at the centre of the process.