Supreme Court nullifies NCLT order on Unitech takeover
13 December 2017
The Supreme Court has nullified an order of the National Company Law Tribunal (NCLT) directing the takeover of management of real estate major Unitech Ltd by the central government, as the tribunal did not take its permission beforehand.
The government, during the hearing, also admitted that it should have taken the Supreme Court's permission before moving NCLT, as the case was under the apex court's perusal.
Unitech on Monday moved the Supreme Court against the NCLT order, which allowed the corporate affairs ministry to take over management of the company.
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 NCLT had allowed the government to take control of the real estate major as the case involved thousands of home buyers who were in the lurch after paying huge sums to the real estate major.
The principal bench of NCLT found a a prima facie case of mismanagement and asked the government to submit its list of fresh nominee directors by 20 December.
However, after hearing Unitech's argument separately later in the day, NCLT said its order will be subject to compliance with the apex court's directives.
The Supreme Court had, on 30 October, asked Unitech's promoters to deposit Rs750 crore in its registry by end-December, allowing them to sell their properties for raising the cash.
Around 19,000 homes are delayed by Unitech, while the company owes Rs723 crore to 51,000 fixed-deposit holders. Sanjay and Ajay Chandra, the managing directors of the company, are currently in prison in connection with a criminal case lodged by home buyers of two of the company's projects in Gurgaon.
In a statement issued last Friday, Unitech said the current management of the company has been with it since its inception and was much better equipped in raising funds, and any interference in the working of the current management would be detrimental to the cause of all stakeholders.
The NCLT, on 8 December, 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 tribunal in the interest of nearly 20,000 home buyers.