Duping of NCR homebuyers: SC asks CBI to prepare roadmap to unravel builder-banks nexus

As thousands of unsuspecting homebuyers get duped in Delhi-NCR, the Supreme Court on Tuesday ordered the CBI to prepare a roadmap to unravel the "builder-banks nexus" defrauding them.

"We don't want any reluctance on the part of the CBI. We want to go to the depth of it, to the ultimate extent. They will have a free hand," a Bench of Justice Surya Kant and Justice N Kotiswar Singh said.

The top court asked Additional Solicitor General Aishwarya Bhati to submit a proposal in two weeks outlining the probe and resources, including the manpower needed.

Noting that the RBI did not have the required expertise in dealing with these issues, the Bench said that’s why it asked the CBI to do the job.

It appointed advocate Rajiv Jain -- a former Intelligence Bureau officer -- as amicus curiae as he possessed the knowledge in dealing with economic offences. It asked Bhati to submit a brief note on the proposal to the amicus curiae.

The order came on petitions filed by several homebuyers -- who booked flats under subvention schemes in various housing projects in Noida, Greater Noida and Gurugram. The petitioners alleged that they were being forced by banks to pay EMIs despite no possession of flats.

The Bench noted that thousands of homebuyers were affected by the subvention scheme, where banks paid 60 to 70 per cent of the home loan amount to the builders without projects being completed within the stipulated time.

Under the subvention scheme, banks disburse the sanctioned amount directly to the accounts of builders, who are then required to pay EMIs on the sanctioned loan amount until flats are handed over to homebuyers. After builders started defaulting on EMIs to banks, as per the tripartite agreement, the banks sought EMIs from the homebuyers.

"We hope that there is no mafia involved," the Bench said.

As Bhati offered to start with Greater Noida, the Bench agreed with her and said the CBI could start with Greater Noida as a pilot project.

"Something effective has to be done in a time-bound manner as a large section of people is affected," the Bench said.

On behalf of a bank, senior advocate Abhishek Manu Singhvi said it had complied with the directions of the top court relating to the details of loan extended, among others.

"I understand there are good apples as well as bad apples. My problem is that I was in the same basket," Singhvi said.

The bench said it won't give a certificate to the bank that it was not involved but if nothing wrong has been done, it need not fear.

"We are only concerned with the kind of hobnobbing they have been doing with the builders and developers. We want to get to the depth of this nexus. Thousands of people are crying due to this. Your fault is that despite knowing there is little progress made in the project, you had disbursed 60 to 70 per cent of the loan amount," it said.

On November 5 last year, the top court sought details from homebuyers, builders-cum-developers, and banks/financial institutions about the payment of instalments of loan, total disbursal of loans, status of housing projects and other details.

The bench said despite its repeated instructions of roughly 40 builders-cum-developers and roughly 30 banks or financial institutions, only nine institutions and five builders-cum-developers filed their compliance affidavits.