The Supreme Court on Wednesday ordered a stay on a National Company Law Tribunal order on Friday suspending all the eight directors of embattled realty firm Unitech Ltd over allegations of mismanagement and siphoning of funds, while authorising the government to appoint its 10 nominees on the board.
On Tuesday, the apex court had expressed its disapproval to the manner in which the government had approached the NCLT in the case of Unitech and the tribunal’s order allowing the government to take control of the company.
“It is extremely disturbing since the matter is pending before us. The leave of the court should’ve been taken,” Chief Justice Dipak Misra said on Tuesday, as he posted the matter for hearing on Wednesday.
Attorney general KK Venugopal told the Supreme Court that that the government should not have approached the NCLT and the tribunal shouldn't have passed an order allowing takeover of Unitech at a time the top court is hearing the matter.
Arguing for Unitech, Mukul Rohatgi challenged the NCLT order saying a judicial tribunal could not have exercised its power in a way where the real estate company was given no hearing.
Seeking for suspension of the NCLT order, Rohatgi added, “I am aggrieved by the manner in which the order was passed. If a copy was given to us, we would’ve responded.”
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Unitech had moved the top court on December 11 challenging the tribunal's order saying that "no coercive steps for execution" can be taken in view of a November 20 order of the Supreme Court.
The government had earlier approached the bankruptcy court to take over the Unitech management to protect the interest of nearly 20,000 home buyers, and 51,000 depositors to whom the company owes Rs. 723 crore.
The Ministry of Corporate Affairs had filed a petition under section 241 of the Companies Act, 2013, which allows the government to apply to the tribunal if it feels that a company is operating in a manner prejudicial to public interest, which in this case were homebuyers, shareholders and depositors.
The MCA petition cites the fate of 19,000 homebuyers, 15,000 small depositors and 700,000 shareholders as constituting public interest. It says the firm has also defaulted on debentures worth Rs 251.78 crore and owes small depositors Rs 596.76 crore.
On October 30, the Supreme Court had directed Unitech to deposit Rs750 crore by December to secure bail for Sanjay Chandra.
Sanjay and Ajay Chandra, part of the firm’s promoter family, are named in a case of forgery lodged by buyers of Unitech’s Gurugram project.