Today, On 22nd October, The CJI D Y Chandrachud allowed the government-appointed board of Unitech to seek police assistance in handling disturbances. Additionally, the court granted permission for the board to approach government authorities to address other grievances. This decision aims to support the board in managing issues while overseeing the company’s affairs during its ongoing resolution process.
New Delhi: The Supreme Court allowed the Centre-appointed board of Unitech Ltd to seek police assistance to address “impediments” caused by third parties on the company’s properties.
Back on January 20, 2020, the court stepped in to help more than 12,000 distressed Unitech homebuyers by allowing the Ministry of Corporate Affairs to take “total management control” of the real estate firm. Retired Haryana cadre IAS officer Yudvir Singh Malik appointed as the company’s Chairman and Managing Director (CMD).
A bench led by Chief Justice D Y Chandrachud, along with Justices JB Pardiwala and Manoj Misra, On Tuesday, addressed an interim plea from the government-appointed board of Unitech Ltd, which highlighted third-party disruptions in managing the company’s properties and affairs.
The bench ordered,
“In the event of impediments created by any third party, the board of directors can seek police assistance,”
The court also allowed the board to approach government authorities for resolving other grievances and directed authorities to provide necessary support to the board.
Earlier, the Supreme Court had emphasized,
“The purpose of appointing a professional board is to allow them to take control of the company and complete the pending projects in the interest of homebuyers.”
The court also granted temporary immunity to the new board from legal proceedings and stated that any ongoing cases against the firm, following court orders, would be suspended until further notice.
The bench clarified that the newly formed board could make commercial decisions in the best interest of homebuyers and pending projects. It also authorized the board to “raise funds due from homebuyers, sell unsold inventory, and resell unclaimed units.”
Additionally, the court permitted the monetization of unencumbered assets to ensure the completion of housing units.
On December 18, 2019, the Supreme Court asked the Centre to reconsider its 2017 proposal, noting the urgent need for a specialized agency to take over Unitech Ltd.’s projects to ensure timely completion for the benefit of homebuyers.
In 2017, the Central Government approached the National Company Law Tribunal (NCLT) with a request to suspend the current directors of Unitech Ltd and take control of the company’s management. However, this proposal was later withdrawn after the Supreme Court issued a stay on the action.
In 2018, the Supreme Court mandated a forensic audit of Unitech Ltd and its affiliated companies, assigning the task to Samir Paranjpe, a Partner in Forensic and Investigation Services at Grant Thornton India.
The forensic audit report indicated that Unitech Ltd received approximately Rs. 14,270 crore from around 29,800 homebuyers, primarily between 2006 and 2014, along with Rs.1,805 crore from six financial institutions for the development of 74 projects. The audit also revealed that roughly Rs.5,063 crore of the funds from homebuyers and about Rs. 763 crore from financial institutions were not utilized by the company.
Additionally, significant investments were made in offshore tax-haven countries between 2007 and 2010.
As a result, the Supreme Court ordered an investigation into the actions of Unitech Ltd’s promoters under the Prevention of Money Laundering Act (PMLA).