Supreme Court stalls government's move to take over Unitech

Gladys Abbott
December 14, 2017

The Supreme Court today put on hold a tribunal's order which allowed takeover of real estate company Unitech by the government. The rules of procedure must be followed while administering justice.

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.

Reacting to the apex court's Wednesday ruling, Unitech said: "The SC order will help the company on its path to complete the projects and to increase the pace of delivery and refunds to customers". The NCLT invoked the provisions of the Companies Act and allowed the government to take over the company.

Attorney General KK Venugopal regretted the government's action of moving the tribunal without first approaching the top court.

Tushar Mehta said he will seek instruction on the issue and appraise the court on Wednesday.

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On October 30, the top court had said Sanjay Chandra, now in jail, would be granted bail only after the real estate group deposited money with its registry by December-end. "The stay of NCLT order would meet the ends of justice", the bench said.

The NCLT, on 8 December, had suspended all the eight directors of the realty firm over allegations of mismanagement and siphoning off of funds and had authorised the Centre to appoint its 10 nominees on the board.

Following the development, Unitech stock fell to a low of Rs 6.43 on the BSE, down 16.38 percent over its previous closing price. For promoter family members - who were seen anxiously discussing the implications with lawyers in the court premises - the wait, however, is not over.Promoters Sanjay and Ajay Chandra, now in judicial custody, have been allowed special facilities to negotiate sale of the group's unencumbered assets to raise Rs 750 crore by the end of December.

Satisfied that a prima facie case was made out, the principal NCLT Bench passed interim orders to remove the company's directors and restricted them from selling, or otherwise encumbering their properties and that of the company's.

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.

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