NCLT has restrained the directors of Unitech from acting as board members.
The tribunal's two-member bench led by Chairman Justice MM Kumar also stated that Unitech directors wouldn't be allowed to sell the company's assets or their assets.
The bankruptcy court asked Corporate Affairs Ministry to suggest 10 nominee directors in four weeks and sought the debt-laden firm's response within the same period.
Government moves NCLT, alleging mismanagement, diversion of funds
The Corporate Affairs Ministry approached NCLT seeking to take control of the troubled real estate company, Unitech, "on the grounds of mismanagement and diversion of funds" by the management.
In its petition, the Ministry also sought suspension of the existing board of Unitech as well as its Chief Financial Officer. The Ministry said it wants to replace Unitech's board with its nominee directors.
Unitech MD Sanjay Chandra arrested
In April 2017, following some homebuyers' complaints, Unitech Managing Director, Sanjay Chandra was arrested by the Economic Offenses Wing (EOW) of the Delhi Police for financial irregularities.
Sanjay Chandra was accused of illegally diverting the capital of one project into a separate company.
He purportedly got the funds invested in the other company and siphoned off the funds into foreign accounts.
Chandra's brother arrested, too
Along with Sanjay Chandra, his brother Ajay Chandra and another person were also arrested in connection with the fraud case linked to delayed housing projects in Noida and Gurugram lodged by agitated homebuyers. Unitech and its subsidiaries did not deliver 19,000 flats to investors.