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Disturbing that govt moves to NCLT when the case was with us, Supreme Court on Unitech issue

In April this year, the Economic Offence Wing (EOW) of the Delhi Police had arrested Unitech Limited's Managing Director Sanjay Chandra and his brother Ajay Chandra for allegedly not developing a project, despite receiving funds from the investors.

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The Supreme Court on Tuesday expressed displeasure over the way in which the government has moved the National Company Law Tribunal (NCLT) to take control of real estate firm Unitech Ltd’s board. The Supreme Court was not happy from the fact that the Centre shifted the case to NCLT without the apex court'spermission. 

The Supreme Court has decided to continue hearing the matter tomorrow and has also sought government’s views on how to protect the interests of homebuyers.

Unitech Ltd moved the Supreme Court on Monday against the order of the National Company Law Tribunal (NCLT) over allowing the government to take control of the real estate company.

On 8 November, the NCLT allowed the government to appoint new management for real estate giant Unitech Limited, as the Corporate Affairs Ministry sought to take control of the embattled company.

The NCLT agreed to the government's plea earlier and issued notices to Unitech's existing directors, who are now restrained from acting as board members. The two-member bench, headed by chairman justice MM Kumar, said the government can appoint 10 nominee directors, whose names it will examine on December 20, the next date of hearing.

However, later on the NCLT refused to keep in abeyance its order of dismissing the Unitech board, saying the new directors will work as per the Supreme Court (SC) directive.

Ramesh Chandra-led Unitech then approached the NCLT the same day, saying no "coercive steps for execution" can be taken in view of a November 20 order by the SC. The company contended that the government did not inform the SC forum on any coercive action against the company.

The tribunal's direction have come on a petition filed by the government to take over the company's management, alleging siphoning of funds. Unitech was dragged to the tribunal by the government seeking to take over the functioning of the firm alleging mismanagement and siphoning of funds by the management.

"In view of the fact and satisfaction of basic criteria for interim directions, a prima facie case is made out and in larger public interest, we grant the interim directions," justice Kumar said, while pronouncing the order.

In April this year, the Economic Offence Wing (EOW) of the Delhi Police had arrested Unitech Limited's Managing Director Sanjay Chandra and his brother Ajay Chandra for allegedly not developing a project, despite receiving funds from the investors. The company has over Rs 6,000 crore debt with more than 16,000 undelivered units from a total of nearly 70 projects.

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