NEW DELHI: The Supreme Court clarified on Wednesday that its aim is to ensure that 22,000 homebuyers of the distressed Unitech Ltd receive their homes. The court urged the newly appointed board by the Centre, along with banks and financial institutions, to propose solutions for resolving this long-lasting dispute.
A bench, including Justices JB Pardiwala and KV Viswanathan, requested both counsel for homebuyers and land-owning agencies to submit a brief two-page note with suggestions within a week.
Around 22,000 homebuyers have been waiting for their homes purchased from Unitech for several years. The management of the firm is now under a government-appointed board.
During the session, Additional Solicitor General N Venkataraman, representing the Unitech board, outlined the financial challenges and obstacles faced by the board.
The law officer suggested that the current board should be allowed to step back, permitting a new board to handle ongoing issues, including the delivery of nearly 22,000 housing units to homebuyers.
“Our goal is to provide homes to homebuyers,” the bench emphasized, noting the need for an amicable solution. Beyond three asset reconstruction companies (ARCs), the bench also asked seven banks and financial institutions to propose approaches to address the deadlock.
The total outstanding amount against the company is currently Rs 14,129.85 crore.
During the hearing, the bench inquired about the whereabouts of the money that homebuyers had deposited.
The law officer revealed that funds from previous promoters had been rerouted to tax havens.
The bench expressed that they had a potential solution in mind and scheduled the case for a hearing in one week, as it has been pending since 2016.
Earlier, the bench warned that it would take strict action if state authorities failed to comply with its orders regarding the real estate group and cautioned against any actions that might obstruct the completion of stalled housing projects.
On January 16 the previous year, the Supreme Court facilitated disbursement of stalled loans for homebuyers of Unitech by exempting certain housing projects from RERA registration requirements, aiding thousands waiting for their homes.
This order was intended to streamline processes for advancing loans to homebuyers in various Unitech projects.
Per the Real Estate (Regulation and Development) Act, 2016, any project exceeding 500 sqm or containing more than eight apartments must be registered with RERA.
Furthermore, the Supreme Court has issued notices to banks and financial institutions for classifying homebuyers’ loan accounts as non-performing assets (NPA) due to delays in project completions, attributed to financial issues under previous management and non-compliance with the RERA Act.
Unitech had sought court direction for the release of stalled loan amounts for homebuyers, arguing that banks had ceased payments due to project delays.
As projects have reportedly resumed, Unitech requested the court to mandate financial institutions to proceed with loan disbursement to homebuyers.
On October 22, 2024, the Supreme Court allowed the Centre-appointed board of Unitech to solicit police assistance in addressing “impediments” placed by third parties on the company’s properties.
Earlier, on January 20, 2020, the court granted the Ministry of Corporate Affairs “total management control” over Unitech.
The board was authorized to recover funds owed by homebuyers and to sell off unsold inventory and unclaimed assets.
Additionally, the board was permitted to monetize the company’s unencumbered assets for the fulfillment of housing units.
In 2017, the Centre had approached the National Company Law Tribunal (NCLT) for the suspension of the current directors and management takeover of Unitech Ltd, but later withdrew after the top court issued a stay on the move.
In 2018, the Supreme Court instructed a forensic audit of Unitech and its affiliates by Samir Paranjpe, Partner at Grant Thornton India.
The audit revealed that Unitech, under its former promoters, had collected about Rs 14,270 crore from 29,800 homebuyers between 2006 and 2014 and approximately Rs 1,805 crore from six financial institutions for 74 projects.
It further indicated that around Rs 5,063 crore of homebuyers’ funds and Rs 763 crore from financial institutions were unutilized, with substantial investments made in tax havens from 2007 to 2010.
