Unencumbered assets of Unitech will be auctioned, says Supreme Court

New Delhi: The Supreme Court on Monday sought details of all unencumbered assets of embattled real estate major Unitech Limited, including personal assets of Managing Director Sanjay Chandra, in order to pay back home buyers seeking the refund of their money.

A bench headed by Chief Justice Dipak Misra also imposed a cost of Rs 25 lakh on J M Financial Asset Reconstruction Company, which had taken over some loans advanced by HDFC Bank to Unitech Limited.

The bench, also comprising Justices A M Khanwilkar and D Y Chandrachud, said that the asset reconstruction company had given the impression that it would pay the money for the refund to home buyers and now the entire proceeding had been diverted.

"We will auction... We will proceed with the auction," said a bench of Chief Justice Dipak Misra, Justice A M Khanwilkar, and Justice D Y Chandrachud.

The bench was told that Unitech has prepared a list of unencumbered properties but it was incomplete.

On March 5, the apex court had directed Unitech to submit a list of its unencumbered properties.

"... the competent authority of Unitech Limited shall file an affidavit mentioning the details of its properties and its subsidiaries, situated in India as well as outside, which are free from encumbrances," the court's March 5 order said.

The court asked senior counsel Ranjit Kumar, appearing for Unitech, to file the incomplete list along with an affidavit. However, the real estate major will complete the list before the next date of hearing.

Pressing for Chandra's bail, Kumar cited the instance of Sahara Group chief Subrata Roy`s bail.

"Here (there are) actual home buyers. They feel cheated and deceived," Chief Justice Misra said, apparently indicating that in the case of Sahara, the investors, as of now, were yet to be ascertained.

In a related development, the court imposed an Rs 25-lakh fine on Chennai-based JM Financial Asset Restructuring Company Limited and dismissed its intervention application.

JM Financial Asset Restructuring Company Limited had picked up the loan obligation of Unitech towards the HDFC bank and rescheduled its repayments.

Besides, it had advanced further loan for the completion of 17 projects in Chennai, Bengaluru, Kolkata, and Gurugram, the court was told.

Describing the action of JM Financial Asset Restructuring Company Limited as a "diversion" from the main issue, the apex court said that during an earlier hearing of the matter an impression was created that JM Finance services was there to help the home buyers.

The court said that senior counsel Guru Krishna Kumar, appearing for the finance company, had urged it to reconsider the fine on the company.

Sanjay Chandra and his brother Ajay were arrested in April last year after investors, who did not get apartments in the company projects as promised, filed complaints of cheating against them.

They were sent in judicial custody after the trial court refused to extend the three- month interim bail granted to them in April.

The Delhi High Court too refused to extend the interim bail that ended on August 10 last year.

(With agency inputs)