In a strong signal to defaulting real estate firms on Tuesday, August 21st, 2018, the Supreme Court of India has ordered a court-mandated committee to initiate an auction of personal assets of directors of real estate giant Unitech Limited.
Mr. Sanjay Chandra – the Managing Director of Unitech and his brother Ajay Chandra were jailed nearly a year ago for cheating the homebuyers.
Earlier, the court had asked Unitech to deposit Rs. 750 crore by December 31st, 2017, but as they failed to do so, the Bench comprising of Chief Justice of India Dipak Misra, Justice A M Khanwilkar and Justice D Y Chandrachud ordered the appointed committee to auction unencumbered personal assets of Unitech directors.
This is the first time that the apex court has ordered auction of the personal assets of directors of a defaulting firm. However, Unitech sources said that this will be very hard for the directors as they are paid employees. "If their personal assets are sold, then that will cause a great loss and hardship to them and their families," they said.
Court has permitted auction of two plots of Unitech in Kolkata which would cover Rs. 116 crore. When the leaseholder of one of the plots showed interest in participating in the auction and said it was willing to purchase both plots, the SC asked for a deposit of Rs. 50 lakh in the court registry to establish bona fide.