Unitech row: SC flays NCLT for allowing Centre to take control of company

Published On: 13, Dec 2017 | Source: financialexpress.com

The Supreme Court on Tuesday expressed displeasure at the manner in which the government moved the National Company Law Tribunal for taking over real estate firm Unitech and termed it “extremely disturbing” since the case is pending before it. A bench led by Chief Justice Dipak Misra also flayed the tribunal for suspending the Unitech board and allowing the government to take control of the indebted real estate firm at a time when the apex court was seized of the case. “We are hearing the matter. The leave of the court should’ve been taken (by the government),” the CJI said, while posting the matter for hearing on Wednesday. It accepted the request of Additional Solicitor General Tushar Mehta that one more day be given to him to seek instruction from the concerned authorities in the matter. “Every concern should not override SC order. I need to check what weighed in favour of the NCLT order,” he said. Homebuyers, however, supported the NCLT’s order, saying that the tribunal’s directions were subject to the Supreme Court’s orders. Requesting the apex court to suspend the NCLT’s order, senior counsel Mukul Rohatgi and Ranjit Kumar, appearing for Unitech, argued that the NCLT passed the order to suspend the board without hearing the company. “I am aggrieved by the manner in which the order was passed. If a copy was given to us, we would’ve responded. By one stroke, without hearing anyone, NCLT has suspended the board,” he said, adding that it should not have passed the order in the first place since the apex court was hearing the case.

The SC had asked Unitech to deposit `750 crore to secure bail of the group promoters — brothers Sanjay Chandra and Ajay Chandra. The top court had earlier directed the jail authorities to facilitate their meeting with company officials and lawyers so that they could arrange money to refund the homebuyers as well as for completing the ongoing housing projects. Unitech had on Monday approached the Supreme Court challenging the NCLT order of December 8 that suspended all its nine directors over allegations of mismanagement and diversion of funds and also allowed the ministry of corporate affairs to appoint its

10 nominee directors to run the company in the interim. It said the NCLT order must be put in abeyance citing the Supreme Court’s November order, which had said no coercive action must be taken against the company. The embattled real estate firm pleaded that the tribunal went contrary to the SC’s earlier directions in a criminal case.

Unitech, in its appeal, said, “Despite clear directions issued by the SC, the tribunal in complete disregard to the said orders proceeded to pass an order which makes the entire process and monitoring being implemented by the apex court a nullity and renders it impossible for the petitioners (Unitech and its directors) to comply with the SC orders.”

In a rare move, the government had approached the tribunal under Section 241 of the Companies Act 2013 to take over the management to protect the interest of 19,000 homebuyers, and 51,000 depositors to whom the company owes `723 crore. The government’s intervention in this case comes almost a decade after it had taken over the board of IT firm Satyam (now Tech Mahindra) and sold it to the Mahindras.