SC To Hear Tomorrow Unitech's Grievance Against NCLT Order Suspending 8 Directors

On Monday, the Supreme Court bench of Chief Justice Dipak Misra, Justice DY Chandrachud and Justice AM Khanwilkar agreed to hear on Tuesday the plea on behalf of civil construction and housing development giant Unitech against the interim order dated December 8 of the NCLT, suspending 8 directors of the company and directing the Centre to nominating 10 directors to the Board of Directors of the company.

On Friday, the principal bench of the NCLT in New Delhi observed that 19,000 home buyers had made substantial payments to Unitech Ltd. and no construction had been commenced so far. Further, it was noted that the company owes Rs. 723 crores to over 51,000 depositors. The affairs of the company are not being conducted in accordance with the provisions of the Companies Act of 2013 and are deemed to be against the larger public interest.

Consequently, the tribunal had issued the impugned order under section 242(4) of the Act of 2013, also restraining the 8 suspended directors from alienating, mortgaging, creating charge or lien in respect of any properties owned personally by the said directors or by the company.

The Central government had moved the tribunal under Section 241 of the Act of 2013 with a view to protect investor interest.

On July 31, 2015, a FIR was registered against Sanjay Chandra and Ajay Chandra, managing directors, Unitech Ltd., under sections 406, 420 and 120 B of the IPC for accepting money from investors to the tune of Rs. 700 crores, even though there were no requisite sanctions and approvals or zoning plan for the construction. The said FIR was filed by 158 flat buyers in respect of the company's 'Wild Flower Country' and 'Anthea' projects in Gurugram, Haryana.

On September 1, the Supreme Court considered the modes of settlement of the grievances of the home buyers -- completion of the construction of flats and handing over of the possession thereof, refund of the amount paid till date by the investors together with interest, or the allotment of alternative plots. Accordingly, the court had directed the company to deposit Rs. 15 crores, followed by Rs. 5 crores, with its registry to be held as interest-bearing short term deposit and paid on pro rata basis to the home buyers seeking refund. The court, appointing advocate Pawan Shree Agarwal as amicus curiae, had also directed him to set up a web portal for flat buyers to register their grievances against the company and their preferred mode of settlement.

The amicus curiae revealed that the possession has not been handed over in respect of 61 projects which comprise of a total of 23,931 flats. It was also submitted that the aggregate amount of refunds claimed crosses the sum of Rs. 2,000 crores as on October 30.

The court on October 30 directed an amount of Rs. 750 crores to be deposited with the registry in an interest earning fixed deposit by the end of December 2017. Subject to compliance with the said order, the directors were granted the liberty to mention their bail plea. The court further directed jail authorities to make appropriate arrangements by way of video conferencing facility etc for the directors to meet with the lawyers and company officials to negotiate the monetisation of unencumbered assets to be applied towards the completion of the construction of the projects and the deposit of the said amount.