Last Friday, the Delhi High Court passed an order that may well signal happier times for both, real estate developer Unitech and those who have bought Unitech homes..The Delhi High Court’s order comes as welcome relief for Unitech. Of the 17,000-odd units sold by the real estate major, possession has been handed over in less than 4,000 units. In addition to this, a number of home-buyers had successfully initiated action before the consumer courts, including the National Consumer Dispute Resolution Commission..It was Unitech’s submission before the High Court that if these decrees were to be enforced, the company would be forced to wind up. Ultimately, none of the home-buyers would get what they had been promised – is what Unitech claims..Accepting this premise, eleven home-buyers filed an application in the High Court, seeking meetings between the home-buyers and the Unitech in order to approve a Scheme of Compromise and Arrangement. Under this scheme, the home-buyers would drop legal proceedings while Unitech would complete the units within a maximum of three years. The scheme also provides for phased exit for those who were not interested in continuing with the project(s)..On the scheme itself, or rather the fact that home-buyers had approached the court, the High Court’s Sudershan Kumar Mishra J observed,.“On the face of it, it is obvious that the petition filed by a group of home buyers may also serve the interests of the company which· is clearly beset by serious financial difficulties that could result in its liquidation……Under the circumstances and since the court is obliged to apply its mind objectively to all relevant factors in this behalf, it hardly matters whether the proposal has emanated from a class of creditors or from the company itself. What is to be seen is whether the Scheme being propounded subserves the interest of all the stakeholders in the company including that of the flat buyers and does not offend the statute.” Mishra J goes on to observe that,Considering the impact and consequences of liquidation; and the feasibility of the homebuyers getting possession of the flats, as promised by the company within a specified time frame, it would be in the interest of the homebuyers if an opportunity is granted to the applicants and the company to put forward their Scheme to each of the homebuyers by convening their meetings at convenient locations and seeking their approval to the proposed Scheme of Compromise and Arrangement.Placing a stay on all proceedings initiated by the home-buyers, barring those before the Supreme Court, the High Court also appointed a Court Commissioner to monitor the escrow accounts set up by Unitech to ensure that the monies in the escrow account were not misused. The Court Commissioner happens to be the High Court’s Registrar, Lorren Bamniyal. The Court also appointed eight lawyers as Chairperson and Alternate Chairperson to oversee the meeting of home-buyers that will be convened in the coming days.Unitech was represented by Axon Partners, with Partner Abhimanyu Bhandari briefing ex Law Minister Salman Khurshid. The applicant home-buyers were represented by another ex Law Minister, Ashwani Kumar..Speaking to Bar & Bench, Bhandari said that the Delhi High Court’s order was unique in a number of ways, and worked in favour of both the home-buyers, and Unitech..Read the Delhi High Court’s order below.
Last Friday, the Delhi High Court passed an order that may well signal happier times for both, real estate developer Unitech and those who have bought Unitech homes..The Delhi High Court’s order comes as welcome relief for Unitech. Of the 17,000-odd units sold by the real estate major, possession has been handed over in less than 4,000 units. In addition to this, a number of home-buyers had successfully initiated action before the consumer courts, including the National Consumer Dispute Resolution Commission..It was Unitech’s submission before the High Court that if these decrees were to be enforced, the company would be forced to wind up. Ultimately, none of the home-buyers would get what they had been promised – is what Unitech claims..Accepting this premise, eleven home-buyers filed an application in the High Court, seeking meetings between the home-buyers and the Unitech in order to approve a Scheme of Compromise and Arrangement. Under this scheme, the home-buyers would drop legal proceedings while Unitech would complete the units within a maximum of three years. The scheme also provides for phased exit for those who were not interested in continuing with the project(s)..On the scheme itself, or rather the fact that home-buyers had approached the court, the High Court’s Sudershan Kumar Mishra J observed,.“On the face of it, it is obvious that the petition filed by a group of home buyers may also serve the interests of the company which· is clearly beset by serious financial difficulties that could result in its liquidation……Under the circumstances and since the court is obliged to apply its mind objectively to all relevant factors in this behalf, it hardly matters whether the proposal has emanated from a class of creditors or from the company itself. What is to be seen is whether the Scheme being propounded subserves the interest of all the stakeholders in the company including that of the flat buyers and does not offend the statute.” Mishra J goes on to observe that,Considering the impact and consequences of liquidation; and the feasibility of the homebuyers getting possession of the flats, as promised by the company within a specified time frame, it would be in the interest of the homebuyers if an opportunity is granted to the applicants and the company to put forward their Scheme to each of the homebuyers by convening their meetings at convenient locations and seeking their approval to the proposed Scheme of Compromise and Arrangement.Placing a stay on all proceedings initiated by the home-buyers, barring those before the Supreme Court, the High Court also appointed a Court Commissioner to monitor the escrow accounts set up by Unitech to ensure that the monies in the escrow account were not misused. The Court Commissioner happens to be the High Court’s Registrar, Lorren Bamniyal. The Court also appointed eight lawyers as Chairperson and Alternate Chairperson to oversee the meeting of home-buyers that will be convened in the coming days.Unitech was represented by Axon Partners, with Partner Abhimanyu Bhandari briefing ex Law Minister Salman Khurshid. The applicant home-buyers were represented by another ex Law Minister, Ashwani Kumar..Speaking to Bar & Bench, Bhandari said that the Delhi High Court’s order was unique in a number of ways, and worked in favour of both the home-buyers, and Unitech..Read the Delhi High Court’s order below.
