The Supreme Court of India has granted the Central Bureau of Investigation (CBI) permission to register six additional cases into a troubling online nexus between banks and builders, aimed at defrauding homebuyers across various cities, including Mumbai, Bengaluru, Kolkata, Mohali, and Prayagraj.
On Tuesday, a bench consisting of Justices Surya Kant, Ujjal Bhuyan, and N Kotiswar Singh responded favorably to Additional Solicitor General Aishwarya Bhati’s request after the CBI completed a preliminary inquiry involving several builders, excluding Supertech Ltd, that operates outside of the National Capital Region (NCR).
The bench noted that evidence collected indicated a cognizable offence, enabling the CBI to proceed legally. Bhati emphasized the need for prompt investigations and informed the court that six regular cases will be initiated to facilitate rapid search and seizure operations.
The Supreme Court’s decision follows an earlier ruling on July 22, which authorized the CBI to probe 22 cases linked to the nexus between banks and developers that aimed to exploit homebuyers in Delhi-NCR. The earlier investigation revealed serious implications for approximately 1,200 homebuyers who have lodged complaints under the subvention schemes where they find themselves paying Equated Monthly Installments (EMIs) without receiving possession of their flats.
Under the controversial subvention scheme, banks disburse loan amounts directly to builders, who are then obliged to cover EMIs until the homeowners receive possession of their properties. When builders default on EMIs, banks shift the burden back to the homebuyers, creating financial distress for many.
The court’s scrutiny revealed an alarming pattern, noting that the CBI’s ongoing investigations suggest a deep-seated collusion among builders, financial institutions, and development authorities. The bench articulated its concern regarding this collusion, highlighting a prima facie connection that implicates various renowned banks and construction companies in regions including Noida, Gurugram, Greater Noida, and beyond.
In a pointed statement during the hearings, the amicus curiae adjustment advocate Rajiv Jain categorized Supertech Ltd as a “main culprit” involved in deceiving homebuyers. He revealed shocking statistics indicating that the Corporation Bank had extended over Rs 2,700 crore in loans to builders through these schemes.
The amicus report underlined that Supertech alone had secured loans exceeding Rs 5,157.86 crore since 1998, with these dealings significantly contributing to the current crises faced by homebuyers.
As the Supreme Court continues to receive petitions from impacted homeowners, there’s an urgent call for accountability from banks and builders alike. The implications could redefine how subvention schemes operate, sparking a wider discussion on the ethics and legality of such financial arrangements within the real estate sector.
Legal experts suggest that the outcome of this investigation could lead to reforms in banking practices related to real estate transactions, providing necessary protections for homebuyers in India. Ultimately, this case stands as a critical reminder of the challenges that persist within the real estate sector and the importance of safeguarding consumer rights.
