Supreme Court Allows CBI to Widen Probe into Builder-Bank-Homebuyer Fraud
The Supreme Court has permitted the Central Bureau of Investigation (CBI) to register six more cases in its expanding probe into an alleged nexus between real estate developers and banks that duped thousands of homebuyers. The investigation, which initially focused on the Delhi-NCR region, will now include projects in Mumbai, Bengaluru, Kolkata, Mohali, and Prayagraj. The court's decision follows a CBI preliminary enquiry that revealed cognisable offences, signalling a major crackdown on systemic real estate fraud nationwide.
Unpacked:
The subvention scheme is a tripartite agreement where banks disburse loans to real estate developers, who are responsible for paying EMIs until the homebuyer receives possession. Many developers defaulted, leaving homebuyers responsible for loan repayments on undelivered flats, resulting in significant losses.
The CBI identified about 19 banks, both public and private, as involved. Supertech, a well-known developer, was specifically named as a major defaulter in earlier court proceedings. The investigation targets several prominent industry players.
Over 1,200 homebuyers and borrowers have petitioned the Supreme Court after being forced to pay for undelivered flats. With the CBI’s expanded investigation, affected buyers may see criminal accountability for the fraud and possible restitution or regulatory reforms for future protection.
After the CBI completed preliminary inquiries that uncovered cognisable offences in projects outside Delhi-NCR, the Supreme Court permitted further cases in Mumbai, Bengaluru, Kolkata, Mohali, and Prayagraj, recognizing the nationwide scope of the alleged builder-bank nexus.