SC permits Unitech's new management to commence construction activities

Supreme Court permits Unitech's new management to commence construction

The Supreme Court on November 3 permitted the new management of Unitech Limited to commence construction activities by allowing the management to management to award 49 contracts as per recommendations of retired SC judge AM Sapre.

The court also permitted the management to award further contracts on an ongoing basis with the approval of Sapre and start the construction works. The apex court had appointed Sapre to assist the new management in the sale of assets.

As a one-time option, the court has permitted homebuyers who had earlier opted for refunds to change their options to possession, however, they must register themselves by sending their details by email. Homebuyers who wish to change their options from refund to possession, but have received partial refunds earlier have been allowed to change their options on upfront payment of refunded amount.

Furthermore, the court directed the homebuyers to make payment of their balance dues in accordance with the Revised Payment Plan so as to facilitate the availability of required cash flows for uninterrupted construction.

Senior advocate and Additional Solicitor General (ASG) who appeared for the new management told the court that it needs to pass these orders for some positive outcome in the case. He further told the court that Sapre has gone to great lengths to ensure these contracts are up to the mark.

On the issues of approvals, the court directed Venkatrman and the lawyers for Noida to discuss and come to a consensus.

In October 2022, the apex court approved the name of the former executive director of Reserve Bank of India, Uma Shankar, as a member of the government-appointed board of directors for Unitech Ltd.

In 2020, the Supreme Court permitted the central government to take over Unitech's management amidst allegations of money laundering and fraud.  Audit firm Grant Thornton's report on the Unitech group and its subsidiary firms had said that thousands of crores of rupees of homebuyers' money was diverted for purposes other than construction and some of the funds were parked in offshore tax havens like Cyprus.

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

The realty firm is facing the wrath of the court in a case related to alleged siphoning off homebuyers' money. 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.