Unitech case: SC to auction unencumbered properties to refund home buyers

The Supreme Court (SC) on Monday said that it will consider auctioning real estate investment firm Unitech's unencumbered properties to raise money to refund home buyers.

To proceed with the auction, the SC has asked the Unitech realtors to furnish a complete list of its unencumbered assets in India and abroad. This would also include the details of personal assets of the company's promoters.

A bench headed by Chief Justice Dipak Misra also imposed a cost of Rs. 25 lakh on JM Financial ARC Ltd. for giving the wrong impression to the court and diverting its attention from the home buyers' issue.

During the last hearing, Unitech had claimed that lending company JM Financial ARC was willing to finance its housing projects and the court had accordingly asked its managing director or a competent officer to be personally present in court on the next date.

On March 5, the SC directed Unitech Ltd. to file a detailed affidavit of their assets both in India and abroad.

The decision follows an order from the top court in December, staying the National Company Law Tribunal (NCLT) order which barred Unitech directors from acting as co-directors of the company over alleged mismanagement of funds.

Earlier, the NCLT had barred directors of the real estate major from acting as co-directors of the company and also issued a notice to Unitech Ltd on the Ministry of Corporate Affairs' plea, seeking a response in four weeks.

Prior to that, the apex court had ordered Unitech to deposit an amount of Rs. 750 crore before the court.

Furthermore, it also stated that the registry of the amount would be done by December-end, to ensure refund to its home buyers.

The next date of hearing of the Unitech case is March 26.

On a related note, Unitech owes Rs. 723 crore to 51,000 fixed deposit holders, and the company and its subsidiaries are yet to deliver 19,000 flats to buyers.