In a big relief to more than 19,000 homebuyers who booked flats around a decade back in Unitech but still await possession, the Centre appointed board of directors told the Supreme Court on Tuesday that the real estate firm, which has been in a financial mess, is set to be revived and flats will be handed over in a phased manner in four years.
The erstwhile management of the group, led by its promoter Sanjay Chandra, was removed by the apex court after it was found that a large amount of homebuyers' money was siphoned off, resulting in a huge financial crunch and a halt in construction that left buyers in a lurch. Chandra and his younger brother are in jail for cheating homebuyers.
Expressing confidence that it would be able to complete Unitech's 78 residential and 13 commercial unfinished projects, the board said 15,000 buyers have expressed faith in the new management as only 10% sought refund.
2.5k Unitech flats will be handed over in a year, another 5,000 in 24 months'
Additional Solicitor General N Venkataraman, appearing for the company, told a bench of Justices D Y Chandrachud and MR Shah that only about Rs 5,000 crore is needed to complete construction while the total amount recoverable is around Rs 30,000 crore, which includes funds diverted by promoters and amount to be paid by homebuyers.
He said funds could be raised on different fronts, including balance receivables from buyers which is around Rs 3,354 crore. As per the resolution plan, Rs 1,322 crore could be recovered sale of land parcels, Rs 3,523 crore from monetisation of unsold inventory and Rs 5,641 crore from land parcels in Noida. He said delivery would be mostly within three years. As per the plan, 2,500 units will be handed over in a year, 5,000 in 12-24 months, another 5,000 units in 24-36 months and the rest between 36 and 48 months.
The new management, however, contended that homes will be delivered at the booked price notwithstanding a lapse of 8-12 years. It said no interest to be charged from the homebuyers on account of defaults in payment and also no delay penalties and delayed interest to the paid to homebuyers.
CMD Yudhvir Singh Malik, a retired IAS officer, said homebuyers should not be allowed to get a refund of their investment due to the cash crunch faced by the company and that they should be asked to clear their dues to complete the construction. 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 RS11,173 crore.
"Since the company is already cash-strapped and does not have reserves, it is proposed that no refunds shall be made to homebuyers 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. The bench, thereafter, granted one more opportunity to 4,000 homebuyers, who are seeking refund, to change their minds and opt for flats.