New Delhi: Unitech Ltd approached the Supreme Court on Monday against an order of the National Company Law Tribunal (NCLT) allowing the government to take control of the real estate company. A bench headed by Chief Justice Dipak Misra said that the matter would be heard on Tuesday.

“We are more concerned with home buyers, and not the company or those holding fixed deposits," Misra said.

On 8 December, the NCLT dismissed the board of Unitech while hearing the central government’s plea to take control of the real estate firm, and directed the ministry of corporate affairs (MCA) to nominate 10 directors to the board.

ALSO READ: Unitech: The fall of a real estate giant

NCLT observed that there was a prima facie case that the affairs of the company were not being carried out honestly and there were a number of irregularities in the company’s operations.

MCA, in a rare move, is seeking to take control of the private firm as there are allegations of fund diversion against it, said a person aware of the matter, declining to be named.

The ministry 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—in this case, homebuyers, shareholders and depositors.

To be sure, insolvency proceedings have been initiated against promoters of many realty firms including Amrapali Group, after angry customers dragged builders to court. Last month, the government amended the Insolvency and Bankruptcy Code to include homebuyers as a class of creditors to real estate firms.

Unitech, once India’s second-largest realty firm, after DLF Ltd, owes over Rs7,800 crore to 16,300 homebuyers in 61 projects, according to data collated by Mint.

ALSO READ: Are housing companies such as Unitech too big to fail?

The MCA petition, parts of which were reviewed by Mint, 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 Rs251.78 crore and owes small depositors Rs596.76 crore.

NCLT also restrained Sanjay Chandra and Ajay Chandra, directors of Unitech, from engaging in transactions related to their personal wealth till an investigation into alleged siphoning and diversion of money is concluded.

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.

On 1 April, the Supreme Court had sent both accused to police custody after the prosecution said their custodial interrogation was required to unravel the alleged money trail, beneficiaries of transactions and recovery of project-related documents and other evidence.

On 30 October, the Supreme Court had directed Unitech to deposit Rs750 crore by December to secure bail for Sanjay Chandra.

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