Supreme Court Seeks Amicable Solution for 22,000 Homebuyers of Ailing Unitech Ltd
The Supreme Court has taken a crucial step to address the long-standing issue of 22,000 homebuyers of Unitech Ltd, who have been waiting for their dream homes for several years. A bench comprising Justices JB Pardiwala and KV Viswanathan has directed the new Centre-appointed board of the real estate group, banks, and financial institutions to suggest measures for an amicable resolution of the dispute.
Background of the Dispute
The issue dates back to several years when Unitech Ltd faced financial difficulties and roadblocks, leading to the delay in delivering the homes to the buyers. The court had earlier allowed the Ministry of Corporate Affairs to take control of the management of Unitech Ltd and had also permitted the board to raise funds from homebuyers, sell unsold inventory, and monetise unencumbered assets.
Current Developments
- The court has asked the counsel for the homebuyers and land-owning agencies to furnish a two-page note with suggestions for an amicable resolution within a week.
- The bench has directed three asset reconstruction companies (ARCs) and seven banks and financial institutions to suggest measures to deal with the impasse.
- The total outstanding against the company is Rs 14,129.85 crore.
Previous Orders and Developments
- The court had granted exemption from registration under the RERA for different housing projects located in seven states in January 2023, facilitating the disbursal of stalled loans for flats constructed by Unitech.
- The top court had issued notices to banks and financial institutions, which had declared the loan accounts of homebuyers as non-performing assets (NPA) due to delayed project completion.
- The court had permitted the Centre-appointed board of directors of Unitech to seek police assistance to deal with impediments created by third parties on properties of the embattled realty firm in October 2024.
- The court had allowed the Ministry of Corporate Affairs to take total management control of Unitech in January 2020.
Forensic Audit Report
The forensic audit report by Samir Paranjpe, Partner, Forensic and Investigation Services in M/s Grant Thornton India, revealed that Unitech under its erstwhile promoters Sanjay Chandra and Ajay Chandra had received around Rs 14,270 crore from 29,800 homebuyers and around Rs 1,805 crore from six financial institutions for the construction of 74 projects. The report also stated that around Rs 5,063 crore of homebuyers' money and around Rs 763 crore of funds received from financial institutions were not utilised by the company and high-value investments were made in tax-haven countries between 2007 and 2010.
The Supreme Court's directive is a significant step towards resolving the long-standing issue of the 22,000 homebuyers of Unitech Ltd, and it remains to be seen how the Centre-appointed board, banks, and financial institutions respond to the court's suggestions.