Unitech case: Homebuyers who opted for refund be given one last chance to reconsider decision, says SC

“Another chance will be offered to all homebuyers who had opted for the refund option. I have been asked to reopen the web portal for 30 days for this category of buyers whose number could be as high as 5,000 to 6,000. Partial refund has been made to around 1,167 buyers,” amicus curiae advocate Pawanshree Agrawal told Moneycontrol.

The court has also directed that the homebuyers’ data be collated basis their age and the state of the project. “The court has directed that refunds be prioritised for senior citizens, those people whose projects have not taken off at all,” Agrawal said.

The bench said it would take up the ED's status report for consideration on August 18.

Additional Solicitor General N Venkataraman, appearing for new management of Unitech Ltd, submitted a convenience note to the court.

“Management is not in a position to pay such a huge amount upfront, as it would jeopardise availability of cash-flows for construction. It proposes the following: (a) Such homebuyers may be given another opportunity to revise their options from 'Refunds' to 'Possession' within a period of 60 days. Management envisages that once construction starts some homebuyers may switch their option looking at assurance regarding construction and possession,” the note had said.

The note had also said that if homebuyers still continue to exercise the 'Refund' option, the amount of Refund be restricted to the principal amount paid.

The note had said that homebuyers, who have been refunded the full principal amount had been directed to hand over their title papers along with NOCs, through a court order dated February 15, 2019, but may have failed to do so. Such homebuyers be directed to forthwith hand over the documents within a period of 30 days, failing which such units should be deemed to have been surrendered and the management shall be at liberty to include the same in unsold inventory and sell the same.

The court also issued directions that the amount lying with the Dhingra Committee be transferred to the court registry. “About Rs 1.13 crore would now be transferred to the court registry,” Agrawal said.

During the hearing, Additional Solicitor General Madhavi Divan, appearing for the ED, said the probe agency has filed a status report on the stage of investigation and till now it has attached Unitech Group's properties worth Rs 650 crore out of which Rs 450 crore is recoverable.

Additional Solicitor General N Venkataraman submitted that the new management has prepared a resolution plan under which three categories have been made depending on the stage of the project and those which are in advanced stage shall be completed first.

In the note, the board also pointed out that construction of 15,000 units has to be done by the new management for delivery of possession to homebuyers. At current price levels, estimated cost of construction is Rs. 5,500-6,000 crore. Whereas, if construction is not done, then the refund claims of these homebuyers is approx. Rs. 11,100 crore.

For the purposes of construction and discharge of other liabilities, the company has identified Rs 16,970.85 crore worth of revenue. It had noted that the company ‘has huge outstanding liability on following accounts, as on March 31, 2019 worth around Rs  28,540 to  Rs 29,040 crore.’

The Convenience Note points out that currently there are 74 (Residential) and 10 (Commercial) under-construction projects wherein possession of about 15,000 units has to be delivered to homebuyers. Moreover, the construction and completion of the unsold stock of about 4,000 units have to be taken up simultaneously. Out of the above, 35 no. of projects (comprising 5,918 sold units of which possession has to be given and another 2,090 unsold units) have been assigned to the ARCs

The convenience note points out all the projects which were under the ambit of the committee were successfully taken over by the new management. The balance works which are required to be completed in the advanced staged towers/ units will be completed in accordance with the proposal submitted in the Resolution Framework.

A consolidated amount of Rs 67.75 crore had been disbursed by the Registry of the apex Court in the Committee’s escrow account for development of the projects. An amount of Rs. 1.13 crore is earned as interest on the FDRs which were placed time to time. It had sought permission from the court that the said amount from the Escrow Account to the company’s account so that the same can be utilised for the company’s operations, the note said.

In June, Supreme Court had granted 15-day interim bail to Unitech Ltd's former promoter Sanjay Chandra to attend the last rites of his father-in-law who had expired.

The apex court had also dismissed the bail application of Chandra's brother Ajay Chandra, who is in jail since August 2017. Both Sanjay and Ajay are accused of allegedly siphoning homebuyers' money. The top court in its October 2017 order had asked them to deposit Rs 750 crore with the apex court registry by December 31, 2017.

The Chandras have claimed that they complied with the court's conditions and they have deposited an amount in excess of Rs 750 crore and therefore they are granted regular bail.