The Supreme Court has directed the central bureau of investigation (CBI) to register criminal cases after a preliminary probe confirmed cognisable offences in the alleged nexus between builders and banks that left thousands of homebuyers in the national capital region (NCR) burdened with loans for unfinished projects.
A bench of justice Surya Kant, justice Ujjal Bhuyan and justice NK Singh passed the order after being informed that CBI had completed its seventh preliminary enquiry which established material evidence of criminal conduct. The matter was mentioned by additional solicitor general, Aishwarya Bhati, who placed the agency’s sealed cover report before the court.
The Court says the stage of preliminary enquiries had concluded and told CBI to proceed under law, including registering first information reports (FIRs), wherever offences are found.
The directions came in a batch of petitions filed by over 1,200 home-buyers from Noida, Greater Noida, Gurugram, Ghaziabad and other areas, who alleged large-scale collusion between developers and financial institutions.
In April this year, the apex court had ordered CBI to conduct seven preliminary enquiries into what it described as an 'unholy nexus' between builders and banks. The move followed a report by amicus curiae Rajiv Jain, former director of the intelligence bureau (IB), which flagged systemic irregularities in interest subvention loan schemes between 2013 and 2015.
Under these schemes, buyers were asked to pay only a token amount while banks disbursed the bulk of the loan directly to developers. Builders promised to cover equated monthly instalments (EMIs) until possession, but when projects stalled by 2018–19, banks still pursued buyers for repayments.
The Supreme Court had warned that home-buyers were being held 'to ransom' as projects remained incomplete while loans worth around Rs5,000 crore were disbursed without adequate safeguards. The bench noted that banks had violated Reserve Bank of India's (RBI’s) 2013 guidelines by releasing up to 80% of loan amounts upfront without checking project milestones.
To ensure accountability, the Court had earlier directed the formation of a special investigation team (SIT) within CBI, with officers on deputation from Uttar Pradesh and Haryana. It also ordered coordination with nodal officers from RBI, the National Housing Bank, the Union ministry of housing and urban affairs and local development authorities.
Additionally, three forensic auditors were appointed through the Institute of Chartered Accountants of India (ICAI) to assist in scrutinising financial transactions.
One of the seven enquiries was dedicated to Supertech Ltd, a major developer linked to 21 projects across six cities and more than 799 petitioners. Other probes covered housing projects across Noida, Greater Noida, Gurugram, Ghaziabad, the Yamuna Expressway and beyond.
The apex court had earlier pulled up both builders and lenders, stating that they showed a 'blatant disregard' for court directions and displayed reluctance to cooperate with investigations.
It also noted that many developers are currently undergoing insolvency proceedings under the Insolvency and Bankruptcy Code (IBC), 2016, complicating the recovery process. Until further orders, the Court directed that no recovery certificates be executed against home-buyers, offering them some relief from repayment pressures.
On Tuesday, ASG Bhati confirmed that the seventh and final preliminary enquiry had found sufficient material to justify criminal proceedings. Recording the submission, the bench made it clear that CBI must now move forward without delay and file FIRs.
For thousands of home-buyers who have paid instalments for homes they never received, the Supreme Court’s order marks a crucial shift—from enquiry to criminal investigation—against both builders and banks accused of exploiting them.
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