Supreme Court Aims to Provide Homes to 22,000 Unitech Homebuyers

NEW DELHI: The Supreme Court has made it clear that its primary objective is to ensure that 22,000 homebuyers of the ailing Unitech Ltd get their dream homes. The court has requested the new Centre-appointed board of the real estate group, banks, and financial institutions to provide suggestions for an amicable resolution of the long-pending dispute.

A bench comprising Justices JB Pardiwala and KV Viswanathan also directed the counsel for the homebuyers and the land-owning agencies to submit a two-page note with their suggestions within a week.

Around 22,000 homebuyers have been waiting for houses they booked with Unitech for several years. A government-appointed board has since taken over the management of the real estate firm.

On Wednesday, Additional Solicitor General N Venkataraman, representing the Unitech board of directors, highlighted the financial difficulties and roadblocks faced by the board. He suggested that the current board be allowed to withdraw and a new board take over the affairs of the firm to address pressing issues, including the delivery of nearly 22,000 dwelling units to homebuyers.

The bench emphasized that the primary goal is to provide homes to the homebuyers and stated that an amicable solution must be found. The court also asked three asset reconstruction companies (ARCs) and seven banks and financial institutions to suggest measures to resolve the impasse.

The court noted that the total outstanding against the company is Rs 14,129.85 crore. During the hearing, the bench inquired about the whereabouts of the monies deposited by the homebuyers. The law officer revealed that the former promoters of the firm had parked the money in tax-haven countries.

The bench announced that it had a proposed solution and would list the plea after a week to pass some orders in the case, which has been pending since 2016. The court also warned that it would take a serious view of any non-compliance by state authorities in matters related to the real estate group and cautioned them against creating obstacles in the completion of the stalled housing projects.

On January 16 last year, the Supreme Court came to the rescue of thousands of homebuyers by granting an exemption from registration under the RERA for different housing projects located in seven states. This order was intended to dispense with procedural requirements for releasing and advancing loans to homebuyers of different Unitech projects.

Under the Real Estate (Regulation and Development) Act, 2016, every project measuring more than 500 sqm or more than eight apartments must be registered with the RERA. The top court had also issued notices to banks and financial institutions that had declared the loan accounts of homebuyers as non-performing assets (NPA) due to delays in project completion caused by financial problems during the erstwhile management of Unitech Group and non-compliance under the RERA Act.

On October 22, 2024, the top court permitted the Centre-appointed board of directors of Unitech to seek police assistance to handle impediments created by third parties on the firm's properties. On January 20, 2020, the top court allowed the Ministry of Corporate Affairs to take total management control of Unitech. It permitted the board to raise funds from homebuyers, sell unsold inventory, and monetize unencumbered assets to complete housing units.

In 2017, the Centre had moved the National Company Law Tribunal (NCLT) to suspend the current directors and take control of Unitech's management but later withdrew the proposal after the top court stayed the move. In 2018, the apex court directed a forensic audit of Unitech Ltd and its sister concerns and subsidiaries by Samir Paranjpe, Partner in Forensic and Investigation Services at M/s Grant Thornton India.

The forensic audit report revealed that Unitech, under its erstwhile promoters Sanjay Chandra and Ajay Chandra, had received around Rs 14,270 crore from 29,800 homebuyers, mostly between 2006 and 2014, and around Rs 1,805 crore from six financial institutions for the construction of 74 projects. The report also indicated that around Rs 5,063 crore of homebuyers' money and around Rs 763 crore of funds received from financial institutions were not utilized by the company. Instead, high-value investments were made in tax-haven countries between 2007 and 2010.