It is said that Unitech scandal has cast a cloud so dark on this country that MD Sanjay Chandra feel safer behind the bars. Unitech Limited is India’s second largest real estate investment company and has recently claimed to be the largest real estate builder in the country. At the turn of the century reality firm Unitech was a rising star with a high market cap, badge of India’s second largest developer and an additional hold in telecom business. After a decade, the rising star finds itself in a quagmire of troubles that could shutter it for good. With its telecom business gone, number of housing projects stalled, legal cases for forgery against promoters and a heavy debt, the company is headed for a massive fall.
After a long waiting and unanswered delay by Unitech in depositing of first tranche of Rs 100 crore by May 11, the Supreme Court on Wednesday said any failure would force it to auction personal properties of the directors of the realty firm which had so far failed to either deliver flats or refund money to the restive home-buyers. A bench of CJI Dipak Misra and Justices A M Kahnwilkar and D Y Chandrachud warned the company that its directors would lose their personal properties if the firm failed to deposit Rs 100 crore by May 11. Also Supreme Court refused to grant more time for the deposition of the installment, the bench told Unitech’s Counsel Abhimanyu Bhandari to submit a list of personal properties of the directors to the SC on May 11.
Senior advocate Sajan Poovayya appearing on the behalf of Devas LLP, which was to have a tie-up with Unitech on its Bangalore land, accused Unitech of retreating from its words not going through the ‘due diligence’ by providing necessary documents. “We had given them Rs 15 crore as advance, but Unitech deposited only Rs 5 crore in the SC. What happened to the rest,” Poovayya asked.
The SC ordered Unitech to give list of its unencumbered assets in India and abroad by April 5, as it failed to deposit Rs 750 crore in the SC registry to refund home-buyers’ investments in the builder’s incomplete residential projects. Advocate Gopal Shankaranarayanan appearing for the home-buyers told the bench that Unitech has failed to provide the list of unencumbered properties and asked to give the list of encumbered properties, which could also be sold and the money from the same can be utilized to refund the home-buyers. The other realtor partner of Unitech, pioneer, has deposited the amount of 40 crore in the court and ordered that it should be distributed proportionally among the home-buyers.
The recent arrest of Unitech promoters was the result of homebuyers coming together and fighting the case tooth and nail. The large number of court cases filed by aggrieved homebuyers against real estate developers shows the sorry state of affairs. It seems there aren’t many developers who have not defaulted on promises or not broken rules. However, the recent arrest of managing directors of Unitech for not delivering a housing project on time can be considered a big achievement for the homebuyers who are fighting the case against the developer. Mostly, even if the developers are at fault, homebuyers hesitate to take legal action. This is primarily because of the notion that builders have money and muscle power, and one should stay away from getting into trouble with them. But in the case of Unitech, proactive homebuyers went ahead and filed the cases. The groups of Unitech homebuyers were demanding return of the money with compensation, while decisions have so far been in favour of Unitech homebuyers; the case has been going on for long. They are still waiting for all their money to be returned along with the appropriate amount of compensation.
Courtesy/By: Saumya Singh
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05 May 2018
