Supreme Court allows CBI to register 22 FIRs over alleged fraud by builders and banks under subvention schemes in NCR. The bench termed it an “unholy nexus” causing massive loss to over 1,200 homebuyers.
New Delhi: On July 22, the Supreme Court of India, on Tuesday, gave the green signal to the Central Bureau of Investigation (CBI) to register 22 criminal cases related to the alleged “unholy nexus” between banks and real estate developers, who have reportedly cheated thousands of homebuyers in the National Capital Region (NCR).
These cases are based on the six preliminary enquiries earlier initiated by the CBI, and they will now be treated as regular First Information Reports (FIRs) to take the investigation further.
ALSO READ: CBI to Probe Lawyers’ Bribery Demand for Favourable NCLT Order
A Bench of Justices Surya Kant and N Kotiswar Singh passed this crucial order.
They said,
“We accept the recommendation and the CBI shall accordingly register regular cases and proceed in accordance with law.”
The court acknowledged the seriousness of the issue, pointing out that builders, banks, and even development authorities in Uttar Pradesh and Haryana were under the scanner.
Some of the real estate companies involved have ongoing projects in Noida, Greater Noida, Gurugram, and other NCR areas.
Under the subvention scheme, the banks disbursed sanctioned home loan amounts directly to builders. In return, the builders were supposed to pay the EMIs on these loans until the homebuyers got possession of their flats.
But many builders defaulted on these EMI payments, after which the banks began demanding the EMIs from the buyers—even though they had not received possession of their homes.
This led to legal action by over 1,200 homebuyers who approached the Supreme Court, saying they were being unfairly forced to pay despite no delivery of flats.
While reviewing the CBI’s sealed report, the bench appreciated the agency’s work and said,
“The court appreciates the efforts of the central probe agency in taking up the matter by understanding the gravity and magnitude of the issue and examining over 1,000 persons, visiting 58 project sites.” The court has also asked the CBI to complete the remaining investigation quickly and “take the matter to its logical conclusion.”
The CBI is still investigating a seventh preliminary enquiry related to projects outside the NCR region. This includes locations like Mumbai, Bangalore, Kolkata, Mohali, and Allahabad. The court granted six more weeks for this part of the probe.
The court also directed Additional Solicitor General Aishwarya Bhati, who appeared for the CBI, to share relevant parts of the sealed report with amicus curiae advocate Rajiv Jain.
The bench said,
“The CBI shall accordingly register regular cases and proceed in accordance with law,”
The Supreme Court observed that the report submitted by amicus curiae Rajiv Jain was an “eye opener” and stressed that it brought to light the urgent need for transparency in the functioning of development authorities, including bodies like RERA.
It also pointed to the importance of ensuring protection for homebuyers against dishonest developers.
Referring to this report, the bench noted,
“We will not entertain those home buyers, who are very few in numbers and would not allow them to misuse the platform of court. We will ask them to move to the appropriate forum and avail whatever legal remedy they have but not this court.”
The next hearing in this matter is expected in the next 10 to 15 days.
Earlier, on March 29, the Supreme Court had given permission to the CBI to conduct five preliminary enquiries into the working of builders in various NCR cities such as Noida, Greater Noida, Gurugram, Yamuna Expressway, and Ghaziabad.
ALSO READ: [Delhi Excise Policy Case] “Submit the List of Documents”: Court Directs CBI
It also allowed the CBI to register one enquiry into the activities of Supertech Ltd, against whom 799 homebuyers have filed 84 appeals concerning projects in eight cities.
On April 29, the Supreme Court had further directed the CBI to initiate a total of seven preliminary enquiries involving major builders including Supertech Ltd.
While noting the involvement of officials from development authorities, banks, and builders, the court said that there existed a “prima facie nexus” among them across cities like Noida, Gurugram, Yamuna Expressway, Greater Noida, Mohali, Mumbai, Kolkata, and Allahabad.
Advocate Rajiv Jain, in his report to the court, described Supertech Ltd as the “main culprit” behind the large-scale cheating of homebuyers. He also pointed out that Corporation Bank had given out loans of over Rs 2,700 crore to builders through these subvention schemes.
His report further revealed that Supertech Ltd had alone taken loans amounting to ₹5,157.86 crore since 1998.
The court’s latest move marks a significant development in the fight for justice by thousands of homebuyers who were left in financial distress due to the fraudulent practices of builders in collusion with banks.
ALSO READ: Supreme Court Directs CBI to Move Delhi High Court in Coal Scam Case
It also sends a strong message that powerful institutions like the judiciary are ready to hold all wrongdoers accountable, including banks, developers, and even government authorities.
Case Title:
HIMANSHU SINGH AND ORS. Versus UNION OF INDIA AND ORS., SLP(C) No. 7649/2023
READ MORE REPORTS ON SECTION CBI
