Supreme Court adjourns hearing in Unitech case against NCLT till Wednesday

Ivan Schwartz
December 14, 2017

A day after the 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, the apex court on Wednesday made a decision to stay the NCLT order.

A bench comprising of Chief Justice Dipak Misra and Justice A M Khanwilkar and D Y Chandrachud had observed yesterday, "The leave of this court, which is seized of the matter, should have been taken by the NCLT", adding, "we are only asking that we are seized of the matter and the NCLT is passing the order".

This is the second occasion when the government has taken recourse to the Section 241 (2) for taking over the management of an embattled company. The Supreme Court had allowed Sanjay Chandra to negotiate with suitable buyers from jail and sell assets and generate funds.

By the same order, the top court had also refused to interfere with other proceedings going on before other judicial forums with a rider that no coercive action would be taken against him for the execution of orders passed by them. The Centre, during the hearing, admitted that it should have taken the apex court's permission before moving NCLT.

Reacting to the apex court's Wednesday ruling, Unitech said: "The SC order will help the company on its path to complete the projects and to increase the pace of delivery and refunds to customers".

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Seeking suspension of the NCLT order, he said: "I am aggrieved by the manner in which the order was passed". The order of the NCLT and some other courts and forums were coming in the way to meet the objectives of possession and refunds....

The Supreme Court had recently asked Unitech to deposit Rs 750 crore by December-end in bail pleas of Sanjay Chandra and Ajay Chandra, who were arrested by the Economic Offence Wing (EOW) of the Delhi Police in April for allegedly not developing a project despite receiving funds from home buyers.

The company has over Rs 6,000 crore debt and over 16,000 undelivered units from a total of almost 70 projects.

The National Company Law Tribunal (NCLT), which deals with insolvency and company disputes, last week allowed the government to name new directors on the board of the debt-ridden firm, a rare intervention that the government said was meant to protect the public interest.

Other reports by GizPress

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