SC Orders Auction Of Unitech Bosses’ Personal Assets

When the Supreme Court (SC) on August 21 directed a court-mandated panel to go ahead with the auction of personal assets of distressed real estate company Unitech, it sent across a clear message to the developer community — fix your issues or lose your personal belongings. This is the first time the court has ordered auction of personal assets of a distressed company’s bosses. The SC order came after it was informed that the bid to sell Unitech’s Agra property did not get any response.

Unitech was ordered to deposit Rs 750 crore with the apex court by December last year to compensate homebuyers who have been waiting for their homes for years—so far, the company has deposited only Rs 120 crore. Earlier, the court-appointed panel has identified Unitech properties in Agra, Varanasi and Sriperumbudur, and has said Rs 600 crore could be arranged by the sale of these assets. The panel, led by Justice S N Dhingra,  was on May 14 directed to complete the process of auctioning the land properties at Agra within four weeks. Since some of these properties are encumbered, the panel is having a hard time selling them. The company is also trying to sell a plot in Kolkata which is expected to fetch the company Rs 116 crore.

The company has to deliver about 16,300 units and is sitting on a bank loan of about Rs 6,000 crore. Two of its directors, Sanjay and Ajay Chandra, are also serving time in Delhi’s Tihar Jail in a fraud case. Despite their repeated pleas, the court has denied the, bail.

“Every individual’s liberty is precious. But, in this case, the court has to strike a balance between one individual’s liberty and the tears of 16,299 homebuyers who have been running after a mirage for years after investing their hard-earned money,” the SC had earlier observed while denying bail to the Chandras.