Unitech Takeover By Government Put On Hold By Supreme Court

Jon Howard
December 14, 2017

The Supreme Court on Wednesday stayed the order of National Company Law Tribunal (NCLT) allowing the Centre to take over management of embattled realty firm Unitech Limited.

The bench, also comprising Justices A M Khanwilkar and D Y Chandrachud, had on Tuesday expressed unhappiness, saying when the apex court was seized up with the matter, pertaining to Unitech, the tribunal should have taken leave from it before passing any order.

When the matter came up for hearing today, Attorney General KK Venugopal told the Court that the Central government should have taken leave of the Supreme Court before approaching the NCLT. The NCLT invoked the provisions of the Companies Act and allowed the government to take over the company. "The stay of NCLT order would meet the ends of justice", the bench said.

By the same order, the top court had also refused to interfere with other proceedings going on before other judicial forums with a rider that no coercive action would be taken against him for the execution of orders passed by them. "Following this, the NCLT added in its order: ".the order which has been already passed in the forenoon session by this Bench shall be subject to compliances of all directions" of the apex court. "Home buyers are not investors".

Unitech approached to the apex court, saying that its bank accounts have been frozen and the company is finding it hard to deposit Rs 750 crore as asked by the Supreme Court.

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The NCLT in its order said government must name its nominees by the next date of hearing, December 20, while restraining Unitech's eight suspended directors from selling their personal and company properties. "My bank accounts have been frozen on November 21", the company's lawyer had said.

With a total debt of over Rs 6,000 crore, the company has not been able to deliver over 16,000 units from its 70 housing projects spread in different parts of the country.

The government, citing mismanagement and siphoning of funds by Unitech, had sought permission from NCLT to replace the existing 10 directors because it wanted to prevent the company from becoming insolvent and protect 19,000 home buyers who have yet to be handed apartments they had bought.

Earlier in October, the apex court ordered the real estate major to deposit an amount of Rs 750 crore before the court.

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