Govt Gets SC Go-Ahead To Take Over Unitech
The Supreme Court (SC) on January 20, 2020, accepted the government's move to take control of the management of embattled real estate company Unitech. The apex court has granted the new board two months' time, to prepare a resolution plan while also offering it a two-month moratorium from any legal proceedings against the company's management.
On January 18, 2020, the Centre had informed the top court that it was willing to take over the company and its stuck projects, in a move that would come as a relief for as many as 12,000 homebuyers. The government has, however, made it clear that the funds required to complete the stuck projects, must be arranged by selling Unitech’s unsold housing stock and unencumbered assets and by collecting dues from homebuyers.
“The government has the right to refer the company to liquidation in case the assigned takeover is not viable in the absence of requisite resources,” the government said in its submission to the top court while seeking a 12-month moratorium period.
"This court may issue directions to restrain the promoters from alienating, mortgaging, creating charge or lien or interest in the movable and immovable properties owned by them," the government said, adding, services of the panel appointed to sell the company's assets be put on rest.
In 2017, the government had moved the National Company Law Tribunal (NCLT) to take control of the real estate developers after company promoters Sanjay Chandra and his brother Ajay Chandra were arrested on charges on siphoning off funds collected from banks and financial institutions. Accepting the government plea, the NCLT suspended Unitech directors and restrained them selling their company and personal assets.
The government move to take over Unitech was, however, thwarted when the SC, in December that year, stayed the NCLT order. Subsequently, The Centre withdrew its application from the tribunal.
A forensic order of the Noida-based builder and its subsidiaries, carried out on the directions of the top court in 2018, showed that Unitech used nearly Rs 5,063 crore of Rs 14,270 crore it collected from 29,800 homebuyers between 2006 and 2014 for building 74 projects, to make high-value investments in tax havens. The same was done with around Rs 763 crore of the Rs 1,805 crore it borrowed from six banks.
Noida Authority Cancels Land Allotment To Unitech For Not Paying Dues
October 31, 2019: In a move against crisis-hit realtor Unitech for non-payment of dues worth Rs 1,203 crore, the Noida Authority on October 21, 2019, cancelled the allotment of a group housing property in Sector 113. The real estate group had also come up with 17 towers in the area, without getting the map cleared by the authority, in violation of the Noida Building Regulation, 2010, it said.
According to the Noida Authority, Unitech was served a notice on August 24, 2019, and multiple other notices prior to that, in which it was asked to clear the pending dues. It could not present any satisfactory explanation within the stipulated time limit and hence the action has been taken.
The Group is also accused of trying to have an agreement to sell this land to M/s Sethi Residents and M/s GMA Developers, making them third-party, without seeking the authority's permission.
NBCC Ready To Oversee Unitech's Stalled Projects, Centre Informs SC
September 6, 2019: After getting the responsibility to complete all stuck projects of insolvency-hit Amrapali Group, state-led NBCC Ltd (earlier known as National Buildings Construction Corporation Limited) may turn the saviour for about 16,000 homebuyers, who have invested in various projects of embattled Unitech Ltd. The centre, on July 29, 2019, informed the Supreme Court (SC) that the public construction company was willing to take up the role of project management consultant, to complete the pending projects of the real estate company that has an outstanding debt of Rs 6,000 crores. NBCC will not directly involve itself in the construction but recruit a third-party to do the work; its role would be entirely of an overseer. Assets of the cash-strapped developer company would be sold, to finance the construction work.
The government has also told the SC that a high-powered panel would be established, to ensure that the projects are completed in a time-bound manner. In the meantime, all facilities extended to jailed company promoters, Sanjay Chandra and Ajay Chandra, have been withdrawn owing to their non-cooperation in an ongoing forensic audit. In 2017, the top court had directed the Tihar jail authorities, where the brothers are lodged, to facilitate Chandras’ meeting with company officials, so that they could arrange money for refunding buyers, as well as completing projects.
The Chandras were denied parole, as they had failed to deposit the entire bail money (they had deposited Rs 481 crores of the Rs 750 crores that they were obliged to). In December 2018, the SC had ordered a forensic audit of the company and its subsidiary companies, over the alleged financial irregularities and diversion of homebuyers' funds. Of the 74 construction projects undertaken by the embattled realtor, as many as 61 are incomplete, affecting about 16,300 homebuyers. The forensic audit is expected to be carried out in various phases.
Relief for Uniworld project buyers
September 5, 2019: Coming to the rescue of 33 buyers who had booked flats in the Uniworld project in Noida Sector 117, the National Consumer Disputes Redressal Commission (NCDRC) has asked Unitech to complete construction within nine months and hand over the possession to them, along with an eight per cent interest for the delay. The interest would be counted from the date committed for delivery of possession till the day on which the possession would be offered. The apex consumer panel also directed Unitech to pay Rs 50,000 as litigation cost to the complainants.
Flats in the Uniworld project were sold starting 2009, and the builder promised delivery in 2012.
NCDRC tells Unitech to refund over Rs 1 crore to homebuyers
August 27, 2019: The National Consumer Disputes Redressal Commission (NCDRC) has asked Unitech to refund over Rs 1 crore to two buyers for a six-year delay in giving possession of their apartments. The company has been asked to refund the buyers within three months, along with a 10 per cent per annum interest on the principal amount and Rs 25,000 litigation cost. The buyers, D Rameshbabu and Swaroop Nandakumar, had booked a flat in Unitech's Gurugram project, The Exquisite' Nirvana Country 2, in 2010 and were promised delivery in 2013.
With inputs from Housing.com News