Former promoters of Unitech granted bail by Delhi court in EOW case

The legal battle against the Chandra brothers began in 2017 when they were arrested in connection with an FIR related to a Unitech project in Gurugram. Unitech's Sanjay Chandra (File Image Source: Reuters)

In a significant development on January 27, the former promoters of real estate developer Unitech — Ajay Chandra and Sanjay Chandra — were granted bail by a court in Delhi in offences charged by Delhi Police's Economic Offences Wing (EOW).

Additional Sessions Judge Navjeet Budhiraja passed the order on the bail applications of the Chandra brothers against whom the Economic Offences Wing (EOW) of Delhi Police registered an FIR for cheating, criminal breach of trust and criminal conspiracy.

The duo will, however, continue to remain in jail as they are accused in a money laundering case.

The court's decision was based on several factors, including the prolonged period of incarceration exceeding six years, the nature of the evidence being documentary with no reported tampering and the fact that the brothers are already on bail in all cases except one related to the Prevention of Money Laundering Act (PMLA).

The Economic Offence Wing (EOW) of the Delhi Police arrested Sanjay Chandra and Ajay Chandra in 2017 on charges of not developing a project despite receiving funds from investors.

The court's rationale for granting bail included the case's complexity, with more than 240 witnesses cited for examination, leading to an anticipated substantial duration for the trial. The court also noted that the Chandra brothers had not tampered with the evidence.

The conditions for the bail stipulate that each applicant must furnish bail bonds amounting to Rs 5,00,000 with two sureties of the same amount to the satisfaction of the Ld. Chief Metropolitan Magistrate (CMM)/Duty Magistrate. Additionally, they are not allowed to leave the country without prior permission from the jurisdictional court.

The Chandra brothers are also required to inform the Investigating Officer and the jurisdictional court about their residential addresses, mobile numbers, and keep their mobile location app open, updating any changes promptly. The court has prohibited them from making inducements, threats, or promises to individuals acquainted with the case and from tampering with evidence. They must attend court proceedings regularly without seeking unnecessary adjournments.

In their arguments at the court, Sanjay Chandra and Ajay Chandra highlighted their continuous incarceration for over six years and presented their role in Unitech Ltd, asserting that they no longer had any influence on the company's decision-making process or access to its records since being replaced by nominee directors in January 2020.

Case history

The legal battle against the Chandra brothers began in 2017 when they were arrested concerning an FIR related to a Unitech project in Gurugram. The Supreme Court later replaced the Unitech board of directors with government-nominated individuals, effectively terminating the Chandra brothers' role in the company.

In 2018, the apex court directed a forensic audit of Unitech Ltd and its sister concerns and subsidiaries by Samir Paranjpe, Partner, Forensic and Investigation Services in M/s Grant Thornton India.

The forensic auditors submitted their report, which said that Unitech Ltd received around Rs 14,270 crore from 29,800 homebuyers mostly between 2006 and 2014 and around Rs 1,805 crore from six financial institutions for the construction of 74 projects.

The audit revealed that around Rs 5,063 crore of homebuyers' money and around Rs 763 crore of funds received from financial institutions were not utilised by the company and high-value investments were made in off-shore tax-haven countries between 2007 and 2010.

In November 2023, the Supreme Court allowed the former Unitech promoters to move to the competent district court for regular bail.

The apex court also permitted the new management of Unitech Limited to commence construction activities by allowing it to award 49 contracts as per recommendations of retired SC judge AM Sapre.

The top court had in March 2021 set aside an order of the Chief Metropolitan Magistrate (CMM) of Patiala House Court granting them bail. It had directed the two to surrender to Tihar Jail authorities.

The Chandra brothers are currently lodged in two separate jails in Mumbai on the apex court's direction.