Moneycontrol
Last Updated : | Source: Moneycontrol.com

Unitech homebuyers move application in SC for government takeover of project

The application moved in the Supreme Court seeks for the immediate suspension/removal of the board of directors of Unitech Limited and the appointment of the nominees of the union/Government of India in its place.

Vandana Ramnani @vandanaramnani1
 
 
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Stating that they are 'aggrieved by the gross failure on the part of Unitech in delivering their contractual obligations, over 100 Unitech homebuyers have moved an application in the Supreme Court asking the apex court to direct the government of India to take over the management of the embattled firm, just as the company law board had done in case of Satyam Computer Services way back in 2001.

The application moved in the Supreme Court seeks for the immediate suspension/removal of the board of directors of Unitech Limited and the appointment of the nominees of the union/Government of India in its place.

The applicants are 'aggrieved by the gross failure on the part of Unitech in making good their contractual obligations of delivering apartments. Also, Unitech is not in a position to and indeed lacks the intention and wherewithal to complete the projects and deliver the apartments to the homebuyers.

It also appears that most of Unitech's assets where there appears to some residual value are encumbered to various financial institutions and development authorities and therefore not capable of being readily sold, it states.

"Given this unfortunate scenario, it is submitted that the most efficacious way forward is that the government of India be directed by this court to take court the management of Unitech," they said.

The Supreme Court is expected to hear the Unitech matter on February 8.

"Defaults of Unitech have not only adversely affected the homebuyers of Unitech by leaving them in a lurch without possession or refund…it can be safely concluded that the manner in which the management of Unitech is being conducted the same is against the public interest hence warranting the indulgence of this court to direct the Central government to take over the management of Unitech," it states.

The application notes that the homebuyers have lost confidence in Unitech and further that given the current position of Unitech, no banks are coming forward to lend to their projects. Therefore, if the government of India takes over the management of Unitech, the confidence of banks and financial institutions will get revived in the projects and the government of India would be in a better position to not only manage but also complete these projects after ensuring that disputes of Unitech with various other government and land-owning agencies are also resolved.

Homebuyers have also pointed out in the application that in certain cases, the embattled builder has been offering possession on ‘as is where is basis’ wherein the homebuyers have been compelled to take over the flats/apartments without the same even having the basic facilities and therefore being in totally non-habitable conditions.

‘It is submitted that half constructed apartment towers due to their unfinished state are completely exposed to the elements and are deteriorating on an everyday basis. Unless urgent measures are taken, the same will deteriorate beyond repair,’ the application states.

It also brings to the attention of the apex court a similar case of Satyam Computer Services in which as per order dated Jan 1, 2001, the company law board had removed the board and in its place appointed 10 nominee directors to save the company.

Despite the apex court giving the company several opportunities to deposit Rs 750 crore for grant of bail to the promoters, the company has 'miserably failed in complying with their several undertakings given to the court. This indicates that financial distress of Unitech but also lack of sincere efforts on the part of the petitioners', it says.

The Burgundy project is located in the township of Unitech Golf and Country Club formerly known as Unitech Grande and was launched by Unitech in sectors 96,97 and 98 in Noida. The UGCC land comprises of 347 acres of land. The Burgundy project was launched on the UGCC land around 2010. Over 900 allottees between 2007-2013 had booked plots and apartments and paid crores. Each has paid about 10 per cent to 95 percent of the total cost paid by them to the company but so far nothing has been delivered

The Supreme Court had last month rejected the bail plea of jailed directors of real estate company Unitech, Sanjay Chandra and his brother Ajay Chandra. The beleaguered realty firm is facing the wrath of the court in a case related to alleged siphoning of homebuyers' money. A bench of Justices DY Chandrachud and Hemant Gupta said Sanjay Chandra did not deposit Rs. 750 crore with the Registry of the Court as per its earlier order

The matter pertains to a criminal case lodged in 2015 by 158 home buyers of Unitech projects' - 'Wild Flower Country' and 'Anthea Project' - situated in Gurugram.

The Supreme Court had earlier stayed the December 8, 2017 order of the NCLT allowing the Centre to take over the management of the realty firm Unitech Ltd.  NCLT on December 8 had 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.

In its petition filed under section 241 of the Companies Act, 2013, the government had requested the tribunal to remove the eight directors and said that the company has over Rs 6,000 crore debt and over 16,000 undelivered units from a total of nearly 70 projects.

vandana.ramnani@nw18.com
First Published on Feb 7, 2019 06:03 pm
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