Unitech seeks stay of NCLT order letting govt to take over management

Unitech seeks stay of NCLT order letting govt to take over management
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New Delhi: Real estate major Unitech on Tuesday sought the suspension of an 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 (NCLT) “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.

Senior counsel Mukul Rohatgi, appearing for the firm, told Chief Justice Dipak Misra, Justice A.M. Khanwilkar and Justice D.Y. Chandrachud that the Corporate Affairs Ministry had taken the government’s permission to proceed against the real estate major in July this year but acted on it only after four months in December.

Giving time till Wednesday to Additional Solicitor General Tushar Mehta to take instructions on the plea by Unitech, Chief Justice Misra observed that the government should have taken the leave of the court before embarking on taking over the company management.

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.

The NCLT’s principal bench, by its December 8 order, had suspended eight directors of the Unitech.

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.

The government had moved the NCLT under Section 241(2) of the Companies Act for taking over the management of Unitech in public interest.

This is the second occasion when the government has taken recourse to this provision for taking over the management of an embattled company. In 2009, the government had invoked the provision of the Company Act to take over the management of Satyam Computers Services Limited citing mismanagement after it surfaced that the company had inflated its balance sheet

Chandra and his brother Ajay were arrested in April after investors, who did not get flats 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.

IANS