The Supreme Court of India granted the Central Bureau of Investigation (CBI) permission on Tuesday to register six additional cases investigating allegations of fraud against homebuyers in the NCR region. This decision focuses on the perceived “unholy nexus” between banks and builders aimed at defrauding buyers in Mumbai, Bengaluru, Kolkata, Mohali, and Prayagraj.
A bench comprising Justices Surya Kant, Ujjal Bhuyan, and N Kotiswar Singh agreed to this course of action after the Additional Solicitor General, Aishwarya Bhati, representing the CBI, reported that the agency had concluded its preliminary inquiry into various builders’ projects, excluding Supertech Ltd.
The court highlighted the CBI’s assertion that their inquiries revealed enough evidence to warrant the registration of proper cases. This move aims to expedite investigations, enabling the CBI to conduct necessary searches and seizures.
The Supreme Court previously permitted the CBI to initiate investigations into 22 cases concerning the nexus between banks and builders that affected homebuyers primarily in the Delhi-NCR area. To facilitate a thorough investigation, the CBI was given six weeks to finalize preliminary inquiries related to properties outside this region.
The ongoing investigations emphasize issues under the subvention scheme, where banks disburse funds directly to builders, who are then responsible for paying Equated Monthly Installments (EMIs) until property possession is transferred to homebuyers.
Many builders reportedly defaulted on their EMI payments, triggering banks to demand payment from the homebuyers instead, despite buyers never receiving their homes.
As part of the judicial proceedings, the court is addressing numerous petitions filed by over 1,200 homebuyers who purchased flats under the subvention scheme. Homebuyers have alleged they face undue pressure from banks to meet EMI obligations, even before their flats have been completed.
In previous rulings, the Supreme Court allowed the CBI to launch investigations into builder activities across several districts, focusing particularly on Noida, Greater Noida, and Gurugram, in line with complaints about wrongdoings involving Supertech Ltd, among others.
In March, the court sanctioned five preliminary inquiries regarding builder-related schemes in key NCR areas, further highlighting systemic issues raised by the homebuyers. The discussion notably included concerns about the legality of the agreements made under subvention schemes and their impact on the market.
Noteworthy also was the revelation from the amicus curiae, who characterized Supertech Ltd as one of the main offenders manipulating the system. The investigation suggested that Corporation Bank funneled more than ₹2,700 crore to builders through various housing loan schemes, exacerbating the situation for many homebuyers.
The amicus curiae’s findings indicated that Supertech Ltd accumulated a staggering loan amount of approximately ₹5,157.86 crore since its commencement, encompassing a variety of projects across multiple states. This grim situation necessitated rigorous legal action to protect the rights of homebuyers and address the alleged fraud perpetrated within the real estate sector.
The Supreme Court’s engagement in this matter reflects a broader concern for the integrity of the real estate market and the financial practices that govern it. The judiciary’s decisions are pivotal in restoring trust among homebuyers and providing a pathway for accountability.
