In a temporary reprieve to realtor giant Unitech over delayed residential projects, the Delhi high court on Friday said the civil proceedings against the company directors can be put in abeyance for the time being.
“The proceedings seeking execution of decrees passed against the company are civil in nature and, thus, it is within the jurisdiction of this Court to keep the same in abeyance so as to provide a fair and reasonable opportunity to the company to fulfill its obligation under the agreement with the individual flat buyers”, the high court order read.
“This protection being granted to the company and its directors is with the sole object of affording them. a reasonable opportunity, as requested by them, to fulfill their commitments towards the flat buyers by completing the flats and handing over the possession to the respective buyers”, the order further stated.
Realtor Unitech was represented by Delhi-based lawyer Abhimanyu Bhandari.
The Delhi high court also has asked Unitech and its homebuyers to work out a formula under which the developer uses 90% of the funds collected from them to construct a project, if a majority of buyers votes in favour of completion.
HC on Friday said the money collected from buyers for project completion has to be deposited in an escrow account and only 10% of the corpus can be used to refund payment to those who want to opt out.
The court also asked the realtor to pay twice the penalty provided for in the agreement with buyers in case a project is delayed by over two years, and 1.5 times if the delay is less than two years. All projects have to be completed in two three years, the court ruled.
Unable to refund money, Unitech had recently offered to allot plots to some buyers who wanted to exit one of its projects, citing delay.
While several buyers have petitioned various courts, the HC has said all proceedings should be kept pending, including those filed in future.
Under the scheme worked out by the court, Unitech will open an escrow accounts for each of housing projects, where all the money collected from existing home buyers or proceeds from fresh sales would be deposited. A representative of the buyers will be one of the signatories of the account and funds will be used for only constructing of the project.
