SC may consider promoters’ custody parole if Rs 180 crore was deposited by May 11. Next date of hearing set for May 2.
The Supreme Court on Monday set the ball rolling for the auction of properties belonging to embattled real estate firm Unitech. To provide relief to homebuyers, the court ordered that all unencumbered properties be auctioned and directed that a public notice be issued in this regard. The next date of hearing has been set for May 2.
The amicus has been directed to get a public notice published, inviting comments on the properties, to make sure that they are unencumbered. “This has to be published before May 2,” said Pawanshree Agarwal, amicus curiae in the Unitech case.
“The court has directed to take out a publication listing all their assets and inviting any objections for the sale of these properties,” he told Moneycontrol, adding after which a committee will be constituted to sell those assets.
The Supreme Court said that it will consider granting custody parole to the promoters in case Rs 180 crore is deposited with it by May 11. “Custody parole is for a limited time only for the purpose of working out the arrangements for the money. It is different from bail,” explained Agarwal.
Unitech is yet to deposit Rs 750 crore to refund homebuyers. It has so far deposited only Rs 18 crore.
In this case, Rs 110 crore has to be deposited by the promoter and Rs 40 crore by the real estate firm’s collaborator Pioneer Urban. The Collaborator has already deposited Rs 10 crore and has been directed to further deposit Rs 30 crore by April 30.
Meanwhile, Unitech submitted a list of assets as directed by the Supreme Court on Monday, sources said. The Supreme Court had ordered Unitech on March 12 to furnish the complete list of its unencumbered assets and had said it would auction them to raise Rs 2,000 crore needed to refund homebuyers who have invested in the distressed realtor’s housing projects.
In the last hearing, appearing for Unitech, senior advocate Ranjit Kumar attempted to hand over an incomplete list of the assets to a bench of Chief Justice Dipak Misra and Justices A M Khanwilkar and D Y Chandrachud, but the bench asked Kumar for a complete list.
How does the order help homebuyers?
The SC move comes on the lines of the Sahara case, where even after repeated orders, the Subrata Roy-led company refused to pay up and finally the court decided to auction its assets to raise capital to repay investors. “In this case too, since the real estate company’s promoters failed to comply with the court’s order even after a year, auctioning the company’s assets is the only option and the best hope for homebuyers,” said Abhishek Dubey, a Supreme Court advocate.
How much time will it take?
The activity may take about six months to a year. In this case, there is no particular deadline to auction the assets. The official liquidator will conduct due diligence, following which it would make an offer and seek regulatory approvals.
“This does not mean that the entire process will get over in a year. What is important here is that homebuyers have been left in the lurch for years by the builder. If it takes one more year for the money to be retrieved as compensation, that is certainly a better option for buyers,” Dubey pointed out.
Meanwhile, Om Shakti Agencies Madras Private Limited had agreed in February to purchase two tracts of lands belonging to Unitech for Rs 400 crore and had been directed by the court to deposit Rs 90 crore, however, as it failed to do so, the court asked the firm on on Monday to pay Rs 75 lakh for backing out from its proposal and wasting the court’s time, said Varun Chopra, Supreme Court advocate.
The apex court also allowed Unitech to sell Unitech Power Transmission Ltd for Rs 100 crore to Shapoorji Pallonji Group, Chopra said and added that the amount would have to be deposited by May 15.
The SC had last year told Unitech that it would consider granting interim bail to its MD Sanjay Chandra only if the company deposited Rs 750 crore in court by December. Chandra has been lodged in jail over a forgery case filed by buyers of a Unitech housing project in Gurugram.
Chandra sought interim bail from the apex court after the Delhi HC rejected his plea in the criminal case lodged in 2015 by 158 home buyers of two of its projects - Wild Flower Country and Anthea Project.