Builder-Bank Nexus: SC Allows CBI to Register Six More Cases for Multi-City Homebuyer Fraud

The Bench of Justices Surya Kant, Ujjal Bhuyan, and N. Kotiswar Singh granted the agency permission to proceed with the registration of cases and conduct investigations in accordance with the law.

Additional Solicitor General Aishwarya Bhati, representing the CBI, informed the Court that the agency had completed preliminary inquiries into various builder projects falling outside the Delhi-NCR region.

The Bench acknowledged the CBI’s submission that preliminary inquiries revealed the commission of cognizable offences, allowing the agency to move forward with formal case registration.

Bhati also stated that the CBI was prepared to register six regular cases to expedite investigations and undertake searches and seizures where necessary.

The Court directed ASG Bhati to share portions of the sealed cover report with amicus curiae Advocate Rajiv Jain to facilitate further proceedings.

This latest order follows the Court’s July 22 decision allowing the CBI to register 22 cases concerning the collusion between banks and developers in the Delhi-NCR region, particularly involving Noida, Greater Noida, Gurugram, and other parts of Uttar Pradesh and Haryana. In that order, the Court granted six weeks to complete preliminary inquiries for projects located outside the national capital region.

The fraud allegations stem from the subvention scheme, under which banks disbursed sanctioned amounts directly to builders. Builders were then obligated, under a tripartite agreement, to pay EMIs on these loans until flats were handed over to homebuyers. However, several builders reportedly defaulted on EMIs, prompting banks to demand payments directly from homebuyers despite non-possession of flats, effectively shifting the financial burden to unsuspecting buyers.

The Supreme Court is currently hearing petitions filed by more than 1,200 homebuyers across NCR who booked flats under subvention plans. These buyers alleged that banks and developers were forcing them to pay EMIs even when possession of flats had not been granted.

Earlier, on March 29, the Apex Court had allowed the CBI to register five preliminary inquiries against builders and projects in Noida, Greater Noida, Gurugram, Yamuna Expressway, and Ghaziabad, including one preliminary inquiry against Supertech Ltd. Notably, 799 homebuyers have filed 84 separate appeals concerning Supertech’s projects across eight cities.

According to the amicus curiae’s report, Supertech Ltd has been identified as the “main culprit” in defrauding homebuyers, while Corporation Bank alone had advanced more than Rs 2,700 crore to builders under subvention schemes. Supertech Ltd, the report stated, secured a total loan amount of Rs 5,157.86 crore since 1998.

The Supreme Court had previously expressed concern over a prima facie nexus between certain banks, builders, and officials from development authorities in cities including Noida, Gurugram, Yamuna Expressway, Greater Noida, Mohali, Mumbai, Kolkata, and Prayagraj. The CBI’s ongoing investigations aim to uncover the extent of collusion and hold the responsible parties accountable.