Supreme Court rejects Unitech promoter Sanjay Chandra's bail plea

The Supreme Court Friday dismissed the bail plea of Unitech Ltd promoter Sanjay Chandra, who was last month granted interim bail for 30 days on "humanitarian grounds" as both his parents had tested positive for COVID-19, and asked him to surrender by August 17.

The apex court also dismissed the bail application of Chandra's brother Ajay Chandra, who is in jail since August 2017.

They both are accused of allegedly siphoning off home buyers' money.

At this stage, we are clearly of the view that since the order dated October 30, 2017 has not been complied with, there is no question of this court directing the release of the applicants (Sanjay and Ajay Chandra) from custody, a bench of Justices D Y Chandrachud and M R Shah said, adding, Both the applications stand dismissed.

The top court in its October 2017 order had asked them to deposit Rs 750 crore with the apex court registry by December 31, 2017.

The bench had on July 7 this year granted interim bail for 30 days to Sanjay Chandra, who was in jail since August 2017.

Later, the court had extended his interim bail till today.

In its order passed on Friday, the apex court said, Sanjay Chandra, who had been granted interim bail by the orders of this court dated July 7, 2020 and July 31, 2020 on the ground of the COVID status of his parents, shall surrender by August 17, 2020.

The bench was dealing with the applications in which both Sanjay and Ajay Chandra have claimed that they have complied with the condition imposed by apex court in its October 2017 order for grant of bail.

Senior advocate Mukul Rohatgi, appearing for them, said that the amount which has been deposited in the court's registry was in excess of Rs 750 crores.

The applicants have had to suffer incarceration for a period of nearly three years despite the order enlarging them on bail, subject to conditions, as a result of their failure to meet the condition of deposit, Rohatgi said.

Additional Solicitor General K M Nataraj, appearing for Delhi Police, opposed the applications and said the applicants were required to deposit Rs 750 crores on or before December 31, 2017.

He referred to the January last year order of the court and said it had rejected the bail application and expressly observed that since the October 2017 conditions were imposed by a three-judge bench, it was not open to a bench of two judges to modify them.

We find that neither of the conditions for deposit have been complied with by the applicants. Admittedly, an amount of Rs 750 crores was not deposited by 31 December 2017. The amount which has been deposited in the Registry of this Court has been realised as a result of the demonetisation of the assets of Unitech Limited, the bench noted.

It noted that since the October 2017 order, significant events have taken place and the apex court had directed a forensic audit to be conducted by M/s Grant Thornton.

It would suffice to note that it was as a result of the findings in the forensic report that this court issued directions for the taking over of the management of Unitech Limited by a Board which has since been constituted by the Union of India, it said.

The bench noted that it had earlier directed the Centre to ensure that all aspects, which were adverted to in the forensic report, should be investigated by the competent agencies, including with regard to the aspect of money laundering.

Serious findings about siphoning of funds to offshore locations and in regard to the misdemeanour of the erstwhile management have been made in the report of the forensic auditors, the bench said.

The apex court directed Nataraj to file a comprehensive affidavit apprising it about the steps taken by investigating agencies in pursuance to the directions and report of the forensic auditors.

The bench has posted the other applications filed in the matter for further hearing on August 24.

The matter pertains to a criminal case which started initially by one complaint lodged in 2015 and later joined by 173 other home buyers of Unitech projects' -- 'Wild Flower Country' and 'Anthea Project' -- situated in Gurugram.

On January 20 this year, in a respite to over 12,000 hassled home buyers of Unitech, the top court had allowed the Centre to take total management control of the realty firm and appoint a new board of nominee directors.

The apex court had approved the name of retired Haryana cadre IAS officer Yudvir Singh Malik as chairman and managing director (CMD) of the new board and directed that existing board of directors of the company would stand superseded.

In 2018, the top court had directed a forensic audit of Unitech Ltd and its sister concerns and subsidiaries by Samir Paranjpe, Partner, Forensic and Investigation Services in M/s Grant Thornton India.

The forensic auditors had submitted their report which said that Unitech Ltd received around Rs 14,270 crore from 29,800 homebuyers mostly between 2006-2014 and around Rs 1,805 crore from six financial institutions for the construction of 74 projects.