Construction crews work on a high-rise luxury apartment block. (Photographer: Pankaj Nangia/Bloomberg News)

Supreme Court To Hear Unitech’s Plea Against Centre Taking Over Firm

The Supreme Court agreed to hear tomorrow the appeal of Unitech Ltd. challenging the recent order of the National Company Law Tribunal allowing the Centre to take over its management.

The NCLT, on Dec. 8, had suspended all the eight directors of the realty firm over allegations of mismanagement and siphoning of funds and had authorised the Centre to appoint its 10 nominees on the board. The order had come after the Centre moved the panel with a view to protect the interest of nearly 20,000 home buyers.

“Let this matter be listed for hearing tomorrow. A copy of the SLP (special leave petition) be supplied to the parties,” a bench comprising Chief Justice Dipak Misra and Justices AM Khanwilkar and DY Chandrachud said today.

Senior Advocate Ranjit Kumar, appearing for Unitech and its jailed promoters, referred to the recent NCLT order and said the takeover of the management of the company by the Centre would make it difficult for them to deposit Rs 750 crore as directed by the apex court to safeguard the interests of homebuyers.

“How do I comply with the Supreme Court order? My bank accounts have been frozen on Nov. 21,” the lawyer said.

“The nominated Directors (of the government) shall have to comply with the orders of the Supreme Court,” the bench said, adding that for it, the interests of homebuyers were paramount and they cannot be equated with the investors.

We are more concerned for the homebuyers and not for the company and not for the fixed depositors. Homebuyers are not investors or fixed depositors.
Supreme Court Order

Sanjay Chandra, head of the embattled real estate group, was asked on Oct. 30 by the apex court to deposit Rs 750 crore with it by December end for the sake of the homebuyers.

The NCLT, in its order, has said the government must give name of its nominees by Dec. 20 and restrained Unitech's eight suspended directors from selling their personal and company properties.

The tribunal's order had come after the government filed a petition arguing that Unitech was a fit case for winding up, but considering the interest of thousands of home buyers and small depositors, it wanted to take over company management.

The company has over Rs 6,000 crore debt and over 16,000 undelivered units from a total of nearly 70 projects.

In its petition filed under section 241 of the Companies Act, 2013, the government had requested the tribunal to remove the eight directors.

The apex court had on Oct. 30 said jailed businessman Chandra will be granted bail only after the real estate group deposited money with its registry by December end.

Chandra's lawyer had told the apex court that he has been required to be produced in various courts, consumer forum and commissions on a regular basis which hampered his endeavour to arrange money and hence, the production warrants issued against him by various judicial bodies be stayed for 15 days.

He had also said that the accused be allowed to appear in courts through his lawyers. The plea was declined.

The apex court had also clarified that its earlier order directing all courts below not to take any coercive action against the accused for the time being would also be made applicable on all forums including state and national consumer commissions.

The top court had earlier directed the jail authorities to facilitate Chandra's meeting with his company officials and lawyers so that he could arrange money to refund the home buyers as well as for completing the ongoing housing projects.

It had said if any proceedings were pending against Chandra and the company, those may continue and the final order be passed but no coercive steps be taken to execute those orders.

Chandra is seeking interim bail from the apex court after the Delhi High Court on August 11 had rejected the plea in a criminal case lodged in 2015 by 158 home buyers of Unitech projects' -- 'Wild Flower Country' and 'Anthea Project' -- situated in Gurugram.