SC puts hold on NCLT order on government’s control over Unitech

A Supreme Court bench of Chief Justice Dipak Misra, D Y Chandrachud, and A M Khanwilkar on Wednesday, has put on stay the order of NCLT that allowed the government to take control over the management of Unitech. The National Company Law Tribunal on December 8, ordered the suspension of 8 directors of Unitech Ltd. on the grounds of mismanagement and siphoning of funds. It further directed the Centre to give the names of ten nominees to be appointed on the board. The bench said that it may consider granting bail to Sanjay Chandra, the company's MD, only if he submits to the court registry a bail bond of Rs. 750 crores. The court further allowed him to use video conferencing facility from the jail, to sell his assets and unencumbered properties to generate this amount. Sanjay Chandra and his brother Ajay Chandra were arrested in April by the Economics Wings office for not delivering the possession of flats to the home buyers as promised. The Supreme court also expressed displeasure over the way the Centre moved to the NCLT under Section 241 of the Companies Act when the matter was already pending before the apex court. According to the said section, the government can take control over the company's affairs if it appears to it that the company is discharging its function in a way that is detrimental to the public interest. Attorney General K K Venugopal admitted that the Centre has committed mistake in approaching the NCLT in this case, Senior Advocate Mukul Rohatgi and Ranjit Kumar representing the firm told the court that the directions given by NCLT are in contravention to the Supreme Court's order dated October 30, that disallowed any sort of coercive action to be taken against the company. Advocate Pawan Aggarwal assisting the court as an amicus curiae informed the court that a total of 4,688 home buyers have made refund claims to the Unitech Ltd. amounting to 1,865 crores.