NCLT declines to keep order passed against Unitech in abeyance

Hours after the Principal Bench of the National Company Law Tribunal (NCLT) in Delhi okayed a government move to place control of Unitech in the hands of ten Nominee Directors, the company hit back.

However, the Bench refused to keep its order passed earlier today in abeyance, further observing that there are larger issues involving irregularities on the part of the company.

The Bench headed by Justice MM Kumar had passed orders this morning, allowing the government to nominate Directors who would in effect replace the existing board subject, to the Tribunals approval. This was in the absence of legal representation for Unitech.

According to Additional Solicitor General Sanjay Jain, Unitech had refused to accept a copy of the government’s petition, and that official serving the same was not allowed to enter the company’s office.

Then at 3:30 pm today, former Solicitor General Ranjit Kumar appeared before the Bench headed by Chairperson Justice MM Kumar, seeking a suspension of its order. Ranjit Kumar relied on a Supreme Court order passed in September prohibiting coercive action against the company, and sought that the earlier order passed this morning be kept in abeyance.

The Bench declined the plea to place the order in abeyance, adding that their order would be subject to the Supreme Court order on which reliance was placed.

The NCLT Bench also observed that a prima facie case of oppression and mismanagement had been made out under the Companies Act 2013, and added that nominated directors and all authorities would be bound by the Supreme Court order that the Company had relied on.

The beleaguered company is facing mounting debt to the tune of over Rs. 6000 crore, and has not delivered more than 15000 units to buyers, spanning 70 projects.

Unitech’s Managing Director Sanjay Chandra and his brother Ajay Chandra were both arrested by the Economic Offences Wing (EOW) earlier this year, for failing to have commenced work on a project despite having received deposits from investors in advance.