The Supreme Court on Monday order auctioning of properties owned by Unitech and its subsidiaries in India and abroad and accused the real estate major of “cheating and deceiving” homebuyers. The proceeds will go to the homebuyers, who have paid Unitech Rs 1,800 crore but have not got possession of their flats.
The court also restrained the company from not parting or diverting any of its assets, including properties held personally by Unitech promoter Sanjay Chandra, who is currently in jail. The SC indicated that after the auctioning of company’s assets, if need be, the personal assets of Chandra could also be put to auction. Unitech submitted a list of all “unencumbered” properties held by it across the country and overseas in a sealed cover.
The company’s counsel senior advocate Ranjit Kumar said the list submitted by them in the sealed cover did not include those held in the name of Chandra. The SC reminded him if any details given in the list were found to be false, the court will initiate criminal proceedings against the persons who submitted the list. The matter is expected to be heard next on March 26.
The proceedings also came as a big shock for an asset restructuring company JM Financial Limited that entered into an agreement with the beleaguered Unitech to finance nine of its housing projects pending at various stages of completion. The Bench headed by Chief Justice Dipak Misra, which summoned the firm’s Managing DirectorAnil Bhatia, asked whether the company could help the cause of the homebuyers.
For JM Financial, senior advocate Guru Krishnakumar submitted that his client entered into a commercial agreement by taking over Unitech’s loans and agreeing to pay the same to the banks to which it owed. The bench, also comprising Justices AM Khanwilkar and DY Chandrachud, said, “You are trying to overreach the court. We are not here to help Unitech to pay its loans but for the homebuyers…tell us how much will you pay them (homebuyers).” With JM Financial refusing to commit any amount towards the common fund meant to repay the homebuyers, the Bench slapped the company with a fine of Rs 25 lakh and dismissed its application for joining proceedings in court.
The bench said that the firm’s intervention was an “unnecessary diversion” from the main case relating to homebuyers who had either wanted refund of their earnest deposit or demanded occupation of flats. The court told Unitech to submit details of all unencumbered assets and directed, “The petitioner (Chandra) shall not encumber any asset or personal assets in his name, for if necessary, even the personal assets shall be auctioned.”
Chandra had approached the SC after the Delhi High Court refused him bail. He is facing a criminal case lodged in 2015 by 158 home-buyers of ‘Wild Flower Country’ and ‘Anthea Project’ situated in Gurugram, Haryana.