Govt withdraws takeover plea of Unitech from NCLT: Sources

moneycontrolnews as published on 30th January 2018

The SC had earlier stayed the December 8 order of the NCLT allowing the Centre to take over the management of the company

The government on Tuesday informed the Supreme Court that it will withdraw the petition filed at National Company Law Tribunal (NCLT) to take over the management of the embattled real estate company Unitech Ltd, sources said.

Legal experts said the “move is reassuring for homebuyers.” “Now the Supreme Court will handle the matter independently and will not give any indulgence to the embattled firm until it deposits a substantial amount with the court registry,” said ML Lahoty, Advocate, Supreme Court, who is also representing Unitech homebuyers.

The SC had earlier stayed the December 8 order of the NCLT allowing the Centre to take over the management of the company.

NCLT on December 8 had suspended all the eight directors of the realty firm over allegations of mismanagement, and siphoning off 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 the company has over Rs 6,000 crore debt and over 16,000 undelivered units from a total of nearly 70 projects.

The NCLT, in its order, had also said the government must give name of its nominees by December 20 and restrained Unitech's eight suspended directors from selling their personal and company properties.

On December 12 Supreme Court expressed serious apprehension about the manner in which the Centre moved the National Company Law Tribunal (NCLT) to take control of embattled real estate firm Unitech Ltd’s board without seeking its permission

Attorney General KK Venugopal had conceded that “this should not happened. The government should not have approached NCLT when Supreme Court was seized of the matter relating to Unitech’s failure to refund homebuyers.”

The stay of NCLT’s order on December 9 had meant that Unitech’s promoter Sanjay Chandra, who is currently in jail, could resume negotiations from prison for sale of assets to generate Rs 750 crore that he had been asked to deposit in court by December end.

The apex court had on October 30 said jailed businessman Chandra will be granted bail only after the real estate group deposited money with its registry by December end. The top court had earlier directed the jail authorities to facilitate Chandra's meeting with his company officials and lawyers so that he could arrange money to refund the home buyers as well as for completing the ongoing housing projects.

The SC on January 29 (Monday) had ordered the firm, which is negotiating with Unitech for purchasing land in Chennai valued at around Rs 400 crore, to appear and deposit the money before it to show its bonafide in acquiring the property on February 16, the next date of hearing.

The real estate firm told a bench headed by Chief Justice Dipak Misra that it was negotiating with a companyto sell two portions of it lands in Chennai for around Rs 170 crore and Rs 229.45 crore respectively.

The bench, also comprising justices AM Khanwilkar and DY Chandrachud, directed the top court registry to issue notice to the company, which is negotiating with Unitech in acquiring the land, asking its competent authority to appear before it on February 16."If the company is desirous of purchasing the property at the value indicated (by Unitech), it can bring a draft of the said amount in the name of the Registrar of the SC so that further directions can be issued," it said.

The apex court did not comment on the request of Unitech Managing Director Sanjay Chandra to grant him custody parole for eight weeks to enable him to arrange money to refund homebuyers and complete the ongoing housing projects.