Government takeover of Unitech: SC says NCLT should have taken its permission

NEW DELHI: The Supreme Court on Tuesday said the company law tribunal NCLT should have taken its leave before allowing the Centre to take over the management of embattled realty firm Unitech Limited.

HIGHLIGHTS

• SC has said NCLT should have taken its leave before allowing the Centre to take over the management of Unitech Limited
• The NCLT, on December 8, had suspended all the 8 directors of the realty firm over allegations of mismanagement and siphoning of funds
• The company has over Rs 6,000 crore debt and over 16,000 undelivered units

A bench comprising Chief Justice Dipak Misra and Justices A M Khanwilkar and D Y Chandrachud, considered the request of Additional Solicitor General Tushar Mehta that one more day be given to him to seek instruction from the concerned authorities on the appeal of Unitech Limited against the order of the National Company Law Tribunal (NCLT).

The bench took note of the submissions of senior advocate Mukul Rohatgi, appearing for the realty firm, that the Tribunal passed an interim order without hearing the company and its directors who are in jail.

"The leave of this court, which is seized of the matter, should have been taken by the NCLT," the bench observed and posted the appeal of Unitech for hearing tomorrow.
The NCLT, on December 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 NCLT order had come after the Centre moved the panel with a view to protect the interest of nearly 20,000 home buyers. Sanjay Chandra, head of the real estate group, was asked on October 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 December 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. The apex court had on October 30 said jailed businessman Chandra will be granted bail only after the real estate group deposited money with its registry by December end.

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.

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.