SC stays government move to take over Unitech

New Delhi: Supreme Court on Wednesday stayed company law tribunal, NCLT, order allowing Centre to take over management of embattled realty firm Unitech Ltd.

The order has come a day after Unitech sought the suspension of the NCLT order suspending its directors and allowing the government to appoint its nominee directors in a take over of the management of the company.

The company told the Supreme Court that the National Company Law Tribunal "could not pass such an order" in the wake of the apex court`s earlier order and asked for the stay on the tribunal order allowing the government to appointment of 10 directors on the company`s board.

The apex court, which had yesterday expressed unhappiness over the Centre's move to approach the NCLT, said the stay on the company law tribunal's order would meet the ends of the justice.

Senior counsel Mukul Rohatgi told the court that the NCLT could not have passed its December 8 order suspending eight directors of the company and allowing government to nominate its own Directors in the wake of October 30 order of the top court.

The top court, by this order, had asked Unitech Managing Director Sanjay Chandra to deposit Rs 750 crore by December end - a condition for the grant of bail - but had refused to interfere with other proceedings before other judicial forums while making it clear that "no coercive steps will be taken" for the execution of orders passed by them.

It had further restrained them from "alienating, mortgaging, creating charge, or lien, or interest in the properties owned by them personally or that of the company till the conclusion of investigation as ordered by it on October 6, 2016.

Last week, NCLT suspended all the 8 directors of Unitech over allegations of mismanagement and siphoning of funds and authorised the government to appoint its 10 nominees on the board.

NCLT had ordered the government to furnish the names of its nominees by the next date of hearing on December 20.

The government argued that Unitech was a fit case for insolvency, but considering the interest of thousands of home buyers and small depositors it would be advisable for the state to take over the company`s management. The government had moved the NCLT under Section 241(2) of the Companies Act for taking over the management of Unitech in public interest.

With Agency Inputs