Will hand over 15,000 Unitech flats in four years, SC told

NEW DELHI: The Centre-appointed Board of Directors of Unitech on Wednesday assured the Supreme Court that it will complete all housing and commercial projects of the real estate company within four years in a phased manner and hand over possession to over 15,000 buyers who had invested their money almost a decade back.

Filing the resolution plan before the apex court to get its approval to start construction work, the group’s Chairman and Managing Director Yudhvir Singh Malik, a retired IAS officer, said home-buyers should not be allowed to get refund of their investment due to the cash crunch faced by the company and that they should be asked to clear their due amount to complete construction work. He said the estimated construction cost is Rs. 5,000 crore and but in case construction is not carried out, refunds will amount to nearly Rs 11,173 crore.

“Since the company is already cash-strapped and does not have reserves, it is proposed that no refunds shall be made to home-buyers and delivery of possession shall be the sole objective. It would include even those cases where litigation is pending for refund or orders for refunds have been passed by consumer forums or any other court of law,” the plan said. It also said homebuyers will not be entitled to any compensation for delay in project works under the previous management.

Terming the present financial position of the group as “dismal”, the plan said the company has a huge liability of more than Rs. 28,000 crore while its realisable current assets as per books of accounts is approximately Rs 3,700 crore. The liability includes outstanding dues of banks/ financial institutions to the tune of Rs 5,413 crore and Rs. 10,456 crore to various government authorities, including NOIDA and GNOIDA.

The new management told SC that it was not advisable to wind up the company by selling its assets as the home-buyers, creditors and all stakeholders would only be getting only a miniscule percentage of their claims. It said the group could be revived and Rs 5,000 crore mobilised from various sources including the balance receivable from existing home-buyers, sale of unsold residential, commercial inventory and recoveries from persons to whom homebuyers’ funds had been diverted by the previous management.

“To ensure that there is sufficient cash flow for meeting the expenses of construction, it is proposed that: (i)home-buyers be directed to pay the balance unpaid amount as per the updated payment plan which will be communicated to them through the website within 90 days from the date of approval of the resolution framework;

(ii) home-buyers would neither be charged any interest/ penalty for delayed payment nor would be entitled to any interest, penalty or refund for delay in possession,” it said.