SC stays NCLT Order Allowing Centre To Take Over Unitech Management 

Attorney General K. K. Venugopal admitted that the Ministry of Corporate Affairs had committed an error in filing a petition before the NCLT.

The Supreme Court bench of Chief Justice Dipak Misra, Justice D. Y. Chandrachud and Justice A. M. Khanwilkar on Wednesday granted stay on the interim order dated December 8 of the NCLT, suspending 8 directors of Unitech Ltd., further restraining them from alienating any property belonging to them or the company and allowing the Centre to take over the management of the affairs of the company by nominating 10 directors to its Board.

Attorney General K. K. Venugopal admitted that the Ministry of Corporate Affairs had committed an error in filing a petition before the NCLT.

On Tuesday, the bench had expressed displeasure at the Centre for approaching the principal bench of the NCLT at New Delhi under section 241 of the Companies Act of 2013 without seeking permission of the apex court. The Court had also frowned upon the interim order dated December 8 of the NCLT, suspending 8 directors of Unitech Ltd., further restraining them from alienating any property belonging to them or the company and allowing the Centre to take over the management of the affairs of the company by nominating 10 directors to its Board.

Senior Counsel Mukul Rohatgi and Ranjit Kumar, appearing on behalf of Unitech, had prayed for an injunction against the operation of the impugned order, arguing that the said order is in contravention of the order dated    October 30  of the Supreme Court forbidding any coercive steps against the company and permitting the Managing Directors of the company, Sanjay and Ajay Chandra, to negotiate from the Tihar Jail the monetisation of company assets with a view to complete construction in respect of projects which are underway and also to deposit the sum of Rs. 750 crores with the Supreme Court Registry by December 31 to be refunded to home buyers claiming the same.

On Tuesday, the bench granted one day's time to Additional Solicitor General Tushar Mehta to obtain instructions from the Centre on its move.

In passing the impugned order, the NCLT had observed that the company had accepted substantial payments from 19,000 home buyers and the construction in respect of the concerned projects had not even been commenced. Further, the company owed Rs. 723 crores to almost 51,000 depositors. Remarking that the affairs of the company are being conducted in violation of the provisions of the Act of 2013 and also to the despair of the larger public interest, the Tribunal had proceeded to pass the order under section 242(2) of the Act of 2013.

The top court scheduled the matter for further hearing on January 12, 2018.