NEW DELHI: The Supreme Court stated on Thursday that it will take a stringent stance against any state authorities that fail to comply with its orders regarding the real estate group Unitech Ltd. The court cautioned against any impediments to the completion of stalled housing projects.
A bench comprising Justices J B Pardiwala and K V Viswanathan established a priority schedule for addressing issues related to Unitech and mandated that state development authorities—such as the Noida Authority, Greater Noida Authority, and Haryana’s Town and Country Planning Department—must grant all necessary approvals.
The bench indicated, “We will seriously consider any non-compliance with previous court orders by state authorities. We will not permit anyone to create obstructions in completing these projects.” This was the bench’s first hearing on the matter.
The Supreme Court assured that all grievances would be resolved swiftly once critical issues are addressed.
“In this court, there will be less hearing and more orders to facilitate progress,” Justice Pardiwala remarked to R C Lahoty, representing the homebuyers.
The bench instructed senior advocate Ravinder Kumar, representing the Noida and Greater Noida authorities, to ensure compliance with earlier court orders permitting the Unitech board to sell unused inventory to generate funds for completing stalled projects.
“We warn you to comply with previous court orders,” the bench told Kumar, after learning that the Unitech board was attempting to raise funds for outstanding projects.
On January 16 of last year, the Supreme Court provided a lifeline to thousands of homebuyers by facilitating the release of their stalled loans for flats developed by Unitech. They granted exemptions from RERA registration for various housing projects across seven states.
The court articulated that this order would serve the interest of justice by streamlining the procedural requirements necessary for advancing loans to Unitech project homebuyers.
Under the Real Estate (Regulation and Development) Act, 2016, any project exceeding 500 sqm or more than eight apartments must be registered with RERA.
The Supreme Court also issued notices to banks and financial institutions that had classified the homebuyers’ loan accounts as non-performing assets (NPA) due to delays in project completion attributed to financial issues under prior Unitech management and non-compliance with the RERA Act.
This action stemmed from a petition by Unitech, which is now managed by a government-appointed board, requesting instructions for the release of stalled loan amounts for homebuyers.
Unitech asserted that financial institutions, which previously approved loans for homebuyers purchasing units in their projects, had halted payments due to project stagnation.
Unitech contended that, since the projects are being revitalized, directives should be issued to financial institutions to release homebuyers’ loans.
The Supreme Court additionally ordered the chairperson of the Uttar Pradesh Pollution Control Board to grant environmental clearances for Unitech projects in Noida.
The court instructed the Noida authority’s CEO to approve three projects, advising that any unresolved issues should be presented to a committee led by former Supreme Court Justice A M Sapre.
On October 22, 2024, the Supreme Court permitted the Centre-appointed board of Unitech to seek police assistance for addressing “impediments” imposed by third parties on the company’s properties.
On January 20, 2020, the Supreme Court allowed the Ministry of Corporate Affairs to assume “total management control” of Unitech, enabling the board of directors to recover funds from homebuyers and sell unsold inventory.
The board was also authorized to monetize the company’s unencumbered assets to finish housing units.
In 2017, the Centre moved to the National Company Law Tribunal (NCLT) seeking suspension of the current directors and to take control of Unitech’s management, although this proposal was withdrawn after a stay from the Supreme Court.
In 2018, the apex court mandated a forensic audit of Unitech Ltd. and its affiliated entities, carried out by Samir Paranjpe from Grant Thornton India.
The audit revealed that Unitech, under former promoters Sanjay and Ajay Chandra, had collected approximately ₹14,270 crore from 29,800 homebuyers mainly between 2006 and 2014. Additionally, about ₹1,805 crore was raised from six financial institutions for the construction of 74 projects.
The audit report indicated that around ₹5,063 crore of homebuyers’ funds and approximately ₹763 crore from financial institutions went unutilized, with significant investments made in offshore tax haven countries from 2007 to 2010.
