IDBI Bank Moves NCLT against Unitech’s Former Promoters over Rs175 Crore Loan Default
SN Thyagarajan (Bar  and  Bench) 10 December 2024
The National Company Law Tribunal (NCLT) on Monday issued notice to former Unitech directors Ajay Chandra and Ramesh Chandra in personal insolvency petitions filed by IDBI Bank in connection with an outstanding loan of a Unitech subsidiary (IDBI Bank v. Ajay Chandra, Ramesh Chandra).
 
A Bench of the NCLT comprising Judicial Member M Sankariah Shanmuga Sundaram and Technical Member Dr Sanjeev Ranjan allowed the issuance of notice by all modes after IDBI Bank's lawyer said that they were unable to serve a copy of the plea on Ajay and Ramesh.
 
"Issue notice by all modes. Returnable on January 6," the Bench ordered.
 
IDBI Bank has moved the NLCT over a loan of Rs175 crore availed by QNS Facility Management Private Limited, a subsidiary of Unitech.
 
Ajay and Ramesh were personal guarantors for the loan. The company defaulted in repaying the loan in 2017, leading the bank to initiate personal insolvency against them.
 
A personal guarantor is an individual who provides a written commitment to a lender, guaranteeing repayment of a loan or credit facility taken by a company. If the company fails to repay, the lender has the legal right to seize the personal guarantor's assets to recover the debt.
 
In 2019, Insolvency and Bankruptcy Code (IBC) was amended to enable creditors or the Resolution Professional (RP) of a company to seek enforcement of personal guarantees for recovery of dues.
 
These amendments were unsuccessfully challenged before the Supreme Court by businessmen like Anil Ambani and Subhash Chandra.
 
Pertinently, Ramesh and Ajay are also involved in a legal dispute with IDBI Bank over allegations of bank fraud. 
 
The Central Bureau of Investigation (CBI) has registered a case against them and other former Unitech officials for alleged criminal conspiracy, cheating and violations of the Prevention of Corruption (PC) Act.
 
The case pertains to a Rs395 crore fraud linked to a Vendor Bill Discounting (VBD) credit facility provided by IDBI Bank to Unitech in 2012. 
 
Due to financial difficulties in the real estate sector, Unitech delayed payments and later secured a rupee term loan to cover its liability. 
 
However, forensic audits revealed that funds raised by Unitech, including those from homebuyers, were diverted to offshore tax havens and misused. 
 
The bank's exposure to Unitech amounted to Rs974.78 crore as of mid-2022, leading to the case being escalated to the CBI. 
 
Comments
sreedharbiyyala
1 month ago
We hope it's not effect on unitech ltd share price, it's now controlled by Gov't and under the supervision of honourable supreme court. Huge valuable land bank expected turnaround story, good luck for share holders and homebuyers
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