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Supreme Court Orders CBI Probe in Builder-bank Nexus in Supertech Projects across NCR
Moneylife Digital Team 02 May 2025
Consumer Interest
Expressing concern over how home-buyers in the National Capital Region (NCR) have been held 'to ransom', the Supreme Court ordered a preliminary probe by the central bureau of investigation (CBI) into an alleged nexus between real estate developers and banks in projects of Supertech Ltd in the NCR. As per the SC directions, CBI will now investigate Supertech projects and the roles of banks which have provided loans worth Rs5,000 crore under the interest subvention scheme for housing projects in the NCR. 
 
This probe was ordered after thousands of home-buyers complained that they were forced to pay equated monthly instalments (EMIs) for flats they never received due to project delays, with banks and builders allegedly colluding under subvention schemes for various housing development projects in Noida, Greater Noida, Gurugram, and other nearby areas.  
 
The Supreme Court bench of justice Surya Kant and justice N Kotiswar Singh considered an affidavit filed by CBI and directed the director general of police (DGP) in Uttar Pradesh (UP) and Haryana to provide a list of deputy superintendent of police (DSPs), inspector and constables to CBI to constitute a special investigation team (SIT).
 
The bench further directed chief executive officers (CEOs) and administrators of greater Noida authority, Noida authority, secretary in the Union ministry of housing and urban affairs, the institute of chartered accountants of India (ICAI) and Reserve Bank of India (RBI) to notify one nodal officer from among their senior-most officers within a week to extend necessary assistance to the SIT.
 
Earlier in March 2025, coming down heavily on builders and financial institutions, the bench mentioned about "the blatant disregard and ignorance of the Court's directions, coupled with the reluctance of builders and financial institutions to assist the Court", which hints towards a possible collusion.
 
The bench warned that it might be necessary to constitute a special investigation team (SIT) to investigate the alleged collusion between builders and banks. "...it may be necessary to constitute an SIT to uncover the nexus between the banks or financial institutions and the builders-cum developers with respect to the development projects where the home-buyers have paid substantial amounts and where the development projects have not even been launched, have not completed construction, or have not begun construction."
 
The case revolves around allegations that several builders-cum-developers, with the assistance of banks and financial institutions, exploited home-buyers through subvention schemes. Under these schemes, builders advertised that they would bear the burden of EMI or pre-EMI payments until possession. However, when the builders defaulted on payments in 2018 and 2019, the banks turned to the home-buyers, demanding payments despite incomplete or stalled projects.
 
The apex court was particularly critical of banks for disbursing substantial loans, up to 70%-80% of the sanctioned amounts, without ensuring that project milestones were achieved, thereby violating the 2013 guidelines issued by RBI. This failure of due diligence led to many projects remaining incomplete or unlaunched, leaving home-buyers burdened with EMI payments without possession of their properties.
 
The apex court also noted that many of the builders are now undergoing a corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code (IBC), 2016, which complicates recovery efforts. Meanwhile, the bench also instructed that no recovery certificates be executed against the home-buyers until further notice. (Read: Supreme Court Blasts Builder-bank Nexus in Home Loan Interest Subvention Scheme, Warns of CBI Investigation)
Comments
sivakumar.gopalakrishnan
4 weeks ago
When two rogues join forces, their combined effect is deadli
er. They always want to rob innocent people with unsuspecting fraudulent schemes..
Reply
parimalshah1
4 weeks ago
Why only NCR. This nexus exists to some degree in almost all the states and the UT.
Reply
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