No liquidity to pay buyers, Unitech tells court

According to Unitech, it could not start work on the residential project because of discrepancies in the title deed. Under the agreement, the government was under obligation to refund the money in such a situation.

Real estate firm Unitech said on Monday that it had no liquidity to pay back those who had invested money in their “incomplete projects.”

According to Unitech, it could not start work on the residential project because of discrepancies in the title deed. Under the agreement, the government was under obligation to refund the money in such a situation.

The submission was made while the company urged the Supreme Court to entertain its petition filed under Article 32 of the Constitution — a jurisdiction invoked when one’s fundamental right is violated — seeking direction to Telangana State Industrial Infrastructure Corporation (TSIIC) to return Unitech’s money deposited in 2008 as a part of an agreement to develop land in Hyderabad.

Senior advocate Kapil Sibal told a bench headed by Justice Dipak Misra that Unitech must get the money back because the project for which the deposit was made never took off. According to him, the government owes the firm Rs 600 core, of which Rs 165 crore is the principal amount. He said if the amount is refunded, Unitech can include it in the compensation scheme it has to prepare on SC’s orders.

Read: Gurgaon: Unitech plot buyers hold protest, threaten bigger movement

Sibal said the scheme has to be presented before the top court by May 5. “Unitech doesn’t have the liquidity to pay back to the consumers. And this amount is an admitted liability since it’s a part of an agreement entered into between the company and AP government,” Sibal argued.

However, the bench showed no interest in entertaining the petition. “We cannot show indulgence to a defaulter under Article 32. You can move the High Court,” the bench said, rejecting the petition. The bench even declined to fix a time limit for the HC to finish hearing the matter, if Unitech approaches it. “It (HC) will take years to decide,” Sibal complained.

According to Unitech, it could not start work on the residential project because of discrepancies in the title deed. Under the agreement, the government was under obligation to refund the money in such a situation.

Last week, the SC had directed Unitech to deposit 14% interest on Rs 16.55 crore invested by 39 home buyers for its project in Gurugram. The firm, already under crisis after its directors were arrested in connection with a cheating case, was warned that failure to meet the deadline could invite attaching the realtor’s property.

It refused to grant more time to Unitech Residential Resorts Ltd, which has delayed handing over of flats to these home buyers.

The interest amount shall be calculated from Janauary 1, 2010 till August 2016, SC said. Unitech has already deposited the principle amount, which the top court’s registry disbursed to the 39 buyers who have opted out of the project on the ground that Unitech did not keep up the promise to deliver the flats by 2012.