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Business
02 May 2017

SC to Unitech: We cannot entertain a defaulter

Unitech lands between rock and a hard place

Unitech is grasping straws at the moment to get rid of multiple charges of money laundering and fraud, that has been brought against the embattled real estate firm.

The Supreme Court has now rejected Unitech's petition citing that the bench will not entertain any plea from defaulters against government and authorities on the basis of fundamental rights.

Here's what happened during the proceedings.

In context

Unitech lands between rock and a hard place
Unitech's plea to release payment

Kapil Sibal

Unitech's plea to release payment

Former minister of Law and Justice and seasoned advocate, Kapil Sibal, appearing for Unitech had placed the said petition.

In the plea, Sibal requested the court to direct Telangana State Industrial Infrastructure Corp. to pay Rs. 165 crore, which the state owes to Unitech.

If not Unitech, at least, an experienced lawyer such as Sibal should have realized that it was a futile attempt.

Arguments

Reasons given for such a plea

Sibal argued that the firm didn't have enough capital at the moment to pay the flat payers and granting the plea would be of assistance in these trying times.

Sibal said that if the firm appealed to the Hyderbad High court for the payment it would fail to refund the flat buyers within the 8th May deadline set by the Supreme Court.

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Article 32, protection of fundamental rights

Article 32

Article 32, protection of fundamental rights

The embattled real estate firm invoked Article 32 of the Constitution to support its argument in front of the bench to get the appeal passed by the Supreme Court.

Article 32 of the Indian Constitution is usually evoked when an entity feels that it's being unduly deprived of its fundamental rights and can, therefore, approach the apex court seeking justice for the same.

Court order

"We know how to execute our orders"

However, in this case, the apex court felt that the plea was without any merit and Unitech should face the consequences of its actions and responded accordingly in its judgement.

The Supreme Court bench replied, "We cannot collect money for you (Unitech). You have to pay the flat buyers for delayed possession. It's our order and we know how to execute our orders."

Final judgement on Unitech's plea

Ultimatum

Final judgement on Unitech's plea

Moreover, "We cannot entertain a defaulter or grant him indulgence under Article 32 of the Constitution. We are not going to interfere with Article 32. You better move the High Court for the relief under Article 226 of the Constitution," said the Supreme Court bench.

The apex court, however, granted consent for the request of withdrawing this petition from the records.

Deadline

Time is running out for Unitech

Unitech has to cough up 14% interest to the 39 home buyers who have invested Rs. 16.55 crore and handover the flats booked by them; failure to do so would lead to a sizeable loss of property from its current portfolio.

Now that this plea has failed, it remains to be seen if Unitech survives the deadline or goes deeper down the rabbit hole.

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