It is not everyday that the Apex Court of the country directs for an auction in order to recover defaulted payments from a party, which is exactly what happened on Tuesday. Although irregular, the order of the court is completely legal and the Court has the full authority to do so. The defaulter in question is the real estate firm, Unitech.
In a case last year where the Supreme Court ordered the realtor company to pay a sum of RS. 750 cr by the end of 2017, the firm claimed that they lack the financial assets to do so. Two founding directors, Mr. Sanjay Chandra and his brothers have been in police custody since nearabout a year. After the failure to furnish the requisite sum, the Supreme Court ordered an auction of the Company’s assets in form of tracts of land in Agra. However, the auction could not be concluded with fruition because of the entanglement of the particular property in financial collateral. Post this, the Supreme Court has now ordered an auction of the personal assets of the directors of the firm. The defendant, in an attempt to protect the partners, pleased the Court for dismissal as following through would result in a great loss to the personnel, most of whom are paid employees. It also means that nothing is off limits in the auction.
The counsel for the imploding firm also claimed that most of the assets of the directors have the burden of financial liabilities tied to them, therefore, they cannot be auctined off.
Whatever the case with the standing of the firm and the directors, it is almost a revelation to witness the Judicial system stand relentlessly against fraudulent firms.
Courtesy/By: Utkarsh Yadav
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23 Aug 2018
