Supernova Case: NCLAT Orders Maintenance Handover to Homebuyers’ Association

The National Company Law Appellate Tribunal (NCLAT) has ruled that the maintenance of common areas in residential projects must be transferred to legally registered apartment owners' associations. This decision reinforces homebuyers' rights and ensures that they assume control over their housing societies, even if the project remains incomplete.

A bench led by NCLAT chairperson Justice Ashok Bhushan, along with members Barun Mitra and Arun Baroka, held that a real estate developer cannot withhold the transfer of maintenance responsibilities once an association is registered. The tribunal emphasized that the law mandates the handover of possession and common area facilities to the association upon its registration.

The ruling was issued in response to an appeal by the Supernova Apartments Owners Association, which sought control over the maintenance of their housing complex in Noida, Uttar Pradesh.

Background of the Case

Supertech launched the Supernova project in Noida’s Sector 94, comprising multiple residential towers, including Nova Residence (East and West). Builder Buyer Agreements were executed between 2011 and 2012. The project was registered with the Uttar Pradesh Real Estate Regulatory Authority (UP RERA) as Supernova Phase I. In July 2018, the Noida Authority issued an occupancy certificate, leading to possession being handed over to homebuyers.

On September 15, 2019, Supertech entered into an agreement with YG Estates Facilities Management Private Limited for the maintenance of all its projects, including Supernova. Meanwhile, homebuyers formed the Supernova Apartments Owners Association, which was officially registered on May 27, 2023. The association demanded the transfer of maintenance responsibilities and control over the Interest-Free Maintenance Security (IFMS) fund.

Legal Proceedings and Objections

The dispute escalated when the association approached NCLAT, seeking a directive for the transfer of maintenance. Supertech Ltd was undergoing insolvency proceedings, and the Interim Resolution Professional (IRP) overseeing the process supported the association’s claim.

On December 19, 2024, NCLAT directed the transfer of maintenance responsibilities to the homebuyers. However, YG Estates refused to comply, citing outstanding dues. On January 31, 2025, the association attempted to take control, leading to an intervention by the city magistrate. YG Estates sought legal clarification, arguing that dues remained unsettled.

After multiple hearings, NCLAT rejected YG Estates' objections. The tribunal clarified that under the Insolvency and Bankruptcy Code (IBC), the IRP has authority over the corporate debtor’s assets, including project maintenance. Since the association was legally registered, it was entitled to take over maintenance responsibilities.

Tribunal’s Justification

NCLAT ruled that YG Estates, being a related party to Supertech and acting on its behalf, could not refuse the handover of maintenance to the association. The tribunal stated that once an association is registered, it is presumed that all legal requirements have been met. Any claims regarding improper registration could not be used as a ground to deny transfer.

Furthermore, the tribunal clarified that real estate companies under insolvency cannot continue to manage common areas through third-party agencies. Maintenance responsibilities must shift to homebuyers once they have formed a legally recognized association.

Regarding pending dues, NCLAT stated that YG Estates could present details of outstanding payments to the IRP. The association also has the right to present its own records regarding liabilities and payments. The tribunal granted both parties the opportunity to resolve financial disputes through the IRP.

The NCLAT’s decision sets a precedent ensuring that apartment owners’ associations have statutory rights over maintenance once legally registered. It provides clarity on the obligations of developers under insolvency and prevents third-party agencies from retaining control over common area management beyond the legal timeframe.