Unitech homebuyers stress restart of construction

A majority of Unitech homebuyers reckon that the resolution of the housing mess need seed money to start construction of stalled projects, and mere the Centre taking over the management of the embattled real estate giant would not serve as a solution.

The Centre has informed the Supreme Court it's willingness to take over Unitech management, a decision which will have significance for nearly 30,000 homebuyers.

In December, the Supreme Court had asked the Centre to explore the possibility of taking over the Unitech management, caught in a financial mess due to siphoning off more than 50 per cent of money deposited by individuals and financial institutions.

In 2009, the government had taken over scandal-hit Satyam.

Advocate M.L. Lahoti, representing nearly 5,000 homebuyers, said the Centre should provide funds to start pending projects, and the seed money could come from the Rs 25,000 crore fund, created to salvage stalled residential projects.

Lahoti insisted that the Centre should prioritise funds, instead of change of hands, to streamline the company management.

According to the government affidavit, the Centre will not provide funds, and also sought stay on the Justice S.N. Dhingra Committee undertaking the work of selling Unitech assets, after the government takeover.

"We will oppose this. The Dhingra committee should continue. We will register our grievances before the Supreme Court. The homebuyers need a long-lasting solution. The Centre can at least allocate Rs 3,000 crore. It's a fit case for using funds meant for residential projects," said Lahoti.

According to the affidavit, the government expresses willingness to have the right to refer the company for insolvency or IBC (Insolvency and Bankruptcy Code) like resolution outside the IBC framework in the backdrop of limited resources to complete the unfinished housing projects.

According to Vivek Kumar, a homebuyers' representative, Justice D.Y. Chandrachud made it clear on the last date of hearing while rejecting the NBCC proposal that after investing 2.5 years on our case, the top court will not leave homebuyers in a lurch and not allow this case to go to IBC as homebuyers won't get anything if the company went for insolvency.

"And it will set a wrong precedent for firms to do all kinds of scams and then go for insolvency and wash their hands & leave the consumers/shareholders/homebuyers/investors in a lurch," said Kumar.

"The government directly allowed this scam -- collection of money against unapproved projects and siphoning off funds by Unitech. Same way, the banks failed to perform their duties. No bank followed any SOP and no quarterly audit was done to see use of funds. The RBI failed to regulate banks. The Rs 4,374 crore loans were given to Unitech (as per the affidavit filed by Ajay Chandra) and they also financed individual homebuyers", Kumar said.

The apex court will hear the case again on January 20.IANS