UnitechBSE 0.65 % on Tuesday urged the Supreme Court to immediately stay the National Company Law Tribunal’s (NCLT) order directing the government to takeover the builder’s management.
The order runs contrary to the top court’s direction to monetise the company’s assets and pay up dues to homebuyers, it argued. The NCLT on Friday told the central government to nominate 10 directors to the company and posted the case for a further hearing on December 20. The order was passed at the instance of the Ministry of Corporate Affairs.
Unitech has appealed against this decision. Former attorney general Mukul Rohatgi argued the company’s case on Tuesday before a three-judge bench led by chief justice Dipak Misra. He contested the legality of the NCLT order on the ground that it violated the top court’s order asking all authorities to desist from passing any coercive orders against Unitech.
“This court is dealing with the case. The man is in jail. He is trying to negotiate to sell his unencumbered properties,” Rohatgi said. “But the government files a 241 petition (under section 241 of the Companies Act) taking over the management of the company. No notice is given. An ad-interim order is passed suspending the entire body. Now no sale, nothing can happen.”
Unitech managing directors Sanjay Chandra and Ajay Chandra are in jail, but the top court had allowed them to negotiate with potential buyers for their assets so as to raise money to complete projects and pay off dues. “No judicial tribunal can pass such an order,” Rohatgi said, questioning the manner in which the NCLT passed the order.
“The order must be suspended immediately.” Justice Misra, who was sitting alongside Justices AM Khanwilkar and DY Chandrachud, asked why the government had to take the issue to the NCLT when the supreme court was dealing with it.
Additional solicitor general Tushar Mehta sought time till Wednesday to deal with concerns raised by Unitech. Lawyers representing homebuyers in Unitech projects urged the court to ensure that their interests were taken care of by the new management. Amicus curiae Pawanshree Agrawal compiled a list of unfinished projects which Unitech is expected to complete. In other cases, the company has to repay the money it collected from homebuyers along with interest.
He has also compiled another list of those who are interested in taking possession of flats. Unitech has so far repaid only a fraction of what it owes. Its appeal said the erstwhile management was in various stages of negotiations for arranging funds for deposit and further constructions.
“The new team would take a really long time to takeover, renegotiate and effectuate such agreements which would further delay the process,” it said. The company has managed to get working capital to finish 654 flats by December end, it said. After the NCLT order, Unitech would not be able to execute settlement agreements or monetise its other unencumbered assets. All this would negate the good work of the amicus curiae, Unitech said.
