The Supreme Court of India granted the Central Bureau of Investigation (CBI) permission on Tuesday to register six more cases, expanding the investigation into the fraudulent practices involving banks and property developers that have duped homebuyers. This investigation focuses on various cities, including Mumbai, Bengaluru, Kolkata, Mohali, and Prayagraj.
The bench, comprising Justices Surya Kant, Ujjal Bhuyan, and N Kotiswar Singh, approved the CBI’s request following the completion of preliminary inquiries into the developers, excluding Supertech Ltd, which operates predominantly outside the Delhi-NCR region. These measures come as part of a larger effort to address a significant real estate scam affecting many innocuous homebuyers.
The CBI’s Additional Solicitor General, Aishwarya Bhati, informed the Court that the agency had valid grounds to suspect a cognizable offence based on findings from the preliminary inquiries. Consequently, the Supreme Court directed the agency to proceed with the registration of the additional six cases for a swift investigation.
The top court emphasized the importance of transparency, instructing Bhati to share pertinent sections of a sealed report with amicus curiae advocate Rajiv Jain, who has been closely monitoring the situation.
This ruling builds on the developments from July 22, when the Supreme Court previously permitted the CBI to investigate 22 cases predominantly concerning the “unholy nexus” between various builders and financial institutions, primarily in Delhi-NCR. The Court had allocated six weeks for the CBI to wrap up its preliminary inquiries, especially focusing on the projects located outside the NCR.
The earlier cases involved several builders operating in the National Capital Region and relevant development authorities in Uttar Pradesh and Haryana. In the subvention scheme designed to benefit homebuyers, banks initially disburse loan amounts directly to construction firms, mandating these firms to cover the EMI payments until homebuyers receive their respective properties. However, when many builders began defaulting on EMIs, banks unexpectedly redirected their financial demands towards the homebuyers, leading to widespread grievances.
The Supreme Court has been dealing with multiple petitions from over 1,200 distressed homebuyers, who argue that they are unjustly pressed to make EMI payments on their loans despite not having received possession of their flats. These concerned individuals focused their complaints on projects located in prominent regions such as Noida, Greater Noida, and Gurugram.
Previously, on March 29, the Court approved the CBI’s initiation of five preliminary inquiries regarding builders in regions like Noida, Greater Noida, Gurugram, Yamuna Expressway, and Ghaziabad. Notably, one of these inquiries specifically targets Supertech Ltd as it faces hurdles involving appeals from 799 homebuyers across eight distinct projects.
A thorough review of the CBI’s sealed cover report as of July 22 suggested a need for 22 regular cases to facilitate a comprehensive investigation into the culpability of both builders and the financial institutions involved.
Moreover, on April 29, the Court directed the agency to maintain focus on seven preliminary inquiries concerning various realty firms in the NCR, including Supertech Ltd itself.
The Supreme Court expressed its dismay regarding the evident collusion among officials from development authorities, banks, and builders, characterizing it as a systematic operation to cheat homebuyers. It noted a prima facie nexus between several prominent banks and builders in multiple locations, including Noida, Gurugram, Yamuna Expressway, Greater Noida, Mohali, Mumbai, Kolkata, and Prayagraj.
The amicus curiae has explicitly marked Supertech Ltd as the primary entity responsible for defrauding homebuyers, revealing that Corporation Bank reportedly loaned over ₹2,700 crores to various builders through these controversial subvention schemes. According to the findings presented by the amicus curiae, Supertech Ltd alone secured loans totaling ₹5,157.86 crores since 1998, contributing to the exacerbation of this major real estate crisis, affecting countless innocent purchasers.
