The Supreme Court today suspended the order of the National Court of Company Law which ordered the government to take over the property management of Unitech. It comes a day after the Supreme Court called the court order “disturbing.”
A bench consisting of Chief Justice Dipak Misra and Justices AM Khanwilkar and DY Chandrachud considered Attorney General KK Venugopal’s statement that the government should not have moved the NCLT when the Supreme Court was seized of the case.
The highest court on Tuesday criticized the NCLT for allowing the central government to form a 10-member board of directors to kick off the takeover process at a time when the SC hears the case. “We’re hearing this case about how the NCLT can make orders. It’s disturbing,” the court said.
He added that the government should have sought permission before going to court. The highest court asked the government to make suggestions on protecting the interests of homebuyers who had invested their money with the debt-ridden real estate agent.
Last Friday, the NCLT suspended Unitech’s eight directors. The move came after the Foreign Ministry approached the real estate court for mismanagement and its failure to complete construction projects on time.
The government also asked the bankruptcy court to suspend the company’s board of directors and its chief financial officer under the 2013 companies law. The NCLT invoked the provisions of the companies law and authorized the government to take over the company.
Unitech approached the Supreme Court, saying its bank accounts had been frozen and the company was struggling to file Rs 750 crore as requested by the Supreme Court. Unitech’s attorney and senior attorney, Ranjit Kumar, said the entire cabinet had been taken over by the government and his appeal needed to be heard urgently. The court had recently asked the real estate company to deposit Rs 750 crore with it by the end of December to protect the interests of home buyers.
With a total debt of over Rs 6,000 crore, the company has been unable to deliver more than 16,000 units of its 70 housing projects spread across different parts of the country. Unitech owes over Rs 723 crore to its 20,000 home buyers and 51,000 depositors.