The Supreme Court of India has granted the Central Bureau of Investigation (CBI) permission to register six more cases as part of an ongoing investigation into a suspected fraud against homebuyers. This fraud, alleged to involve a collusion between banks and builders, affects residents in metropolitan areas including Mumbai, Bengaluru, Kolkata, Mohali, and Prayagraj.
On Tuesday, the bench comprising Justices Surya Kant, Ujjal Bhuyan, and N Kotiswar Singh allowed the CBI’s move based on the agency’s claims that it has completed its preliminary inquiries into multiple real estate projects associated with various developers. Notably, this excludes cases related to Supertech Ltd., which operates outside the Delhi-NCR region.
The CBI reported significant findings during its preliminary inquiries, leading the court to approve the registration of these additional cases. Aishwarya Bhati, the Additional Solicitor General representing the CBI, announced the agency’s readiness to conduct search and seizure operations to expedite the investigation.
This ruling follows the Supreme Court’s earlier decision on July 22, allowing the CBI to initiate 22 cases investigating the unholy nexus in the Delhi-NCR area. The court has mandated the completion of preliminary inquiries concerning the new cases with a six-week timeline.
The CBI’s focus on this builder-bank nexus highlights serious concerns where financial institutions allegedly misled homebuyers through subvention schemes. These schemes allowed banks to sanction home loans directly to builders, with the understanding that builders would pay the EMIs until possession of the flats was handed over. However, many builders have defaulted, shifting the burden of EMIs onto unsuspecting homebuyers.
The apex court noted a growing number of petitions filed by over 1,200 homebuyers. These individuals assert they’ve been coerced into paying EMIs despite not receiving possession of their flats. This has sparked widespread concern in regions like Noida, Greater Noida, and Gurugram, which are at the heart of these fraudulent practices.
The situation escalated earlier this year, when the Supreme Court allowed the CBI to launch five preliminary inquiries into builders operating in areas such as Noida and Ghaziabad. As part of this inquiry, they are scrutinising the business operations of Supertech Ltd., which faces 799 homebuyers’ appeals involving projects across eight different cities.
Amid rising consumer frustration, the court has raised serious concerns about the systemic failures that allow such a nexus to persist. It has emphasized its disapproval of collusion among development authority officials, banks, and builders. The court suggested it has uncovered a clear connection between leading banks and builders, especially affecting homebuyers in various urban centers.
In the context of these findings, the amicus curiae appointed to assist the court highlighted Supertech Ltd. as the “main culprit” in this ongoing fraud. Simultaneously, Corporation Bank has reportedly extended over ₹2,700 crore to builders under questionable subvention schemes, which has raised alarms regarding financial accountability.
The report submitted in a sealed cover indicated that Supertech Ltd. has availed itself of loans totaling ₹5,157.86 crore since 1998. This staggering figure underscores the extent of financial entanglements existing in the real estate sector.
The developments underscore the urgent need for regulatory reforms in India’s real estate sector, which has long been plagued by issues of transparency and consumer protection. As investigations continue, it remains imperative for all stakeholders to ensure homebuyers receive the necessary protections against exploitation.
