NEW DELHI: On Wednesday, the Supreme Court criticized the CBI regarding its investigation into the alleged “unholy nexus” between banks and developers that has reportedly led to homebuyers in Delhi-NCR and other regions being defrauded. The court emphasized that any delays in the probe would only exacerbate the suffering of affected flat buyers.
A bench comprising Chief Justice Surya Kant and Justices Joymalya Bagchi and Vipul M Pancholi took issue with the CBI’s claim that several cases of fraud under the subvention scheme should be handed over to state agencies for further investigation.
The bench rejected this proposal and instructed the CBI to handle all cases, transitioning preliminary inquiries into full investigations. “This court cannot indefinitely await the conclusion of the investigation,” the bench asserted, noting that any delay would deepen the distress already experienced by homebuyers, who have been under pressure from builders and developers in collusion with financial institutions.
The Supreme Court was hearing a series of pleas from over 1,200 homebuyers, led by Himanshu Singh through advocate Akshay Srivastava. The petitioners argued that they were being pressured by banks to pay installments despite not receiving possession of their flats.
The bench ordered investigations into the alleged collusion between banks and builders, which has reportedly defrauded homebuyers via subvention schemes. Under these schemes, banks disburse loan amounts directly to builders, who are obligated to pay installments until flats are transferred to homebuyers.
Following defaults on these payments by builders, banks began demanding installments from the homebuyers, who are the third party in the agreement.
The bench remarked that if the CBI continues to adopt this approach, it may need to establish a committee to oversee the agency’s investigation. They indicated that if the CBI is short-staffed, it can seek assistance from the Economic Offence Wings of state police.
The court expressed dissatisfaction with the lack of investigation into bank officials by the CBI and requested a “responsible officer” from the CBI to submit an affidavit by the next hearing date detailing the progress of all investigations.
The bench advised the CBI to review a report submitted by amicus curiae Rajiv Jain on April 29 last year, and instructed the agency to propose a timeline for completing the probe.
Advocate Pranav Sachdeva, representing another petitioner, suggested that the requirement for prior prosecution sanction under the Prevention of Corruption Act against culpable bank officials be waived, given that this is a court-supervised investigation.
Additional Solicitor General Aishwarya Bhati, representing the CBI, assured the court that any such obstacles would be addressed.
The bench reiterated that all parties involved—including homebuyers, banks, and builders—should submit their claims, suggestions, and recommendations to the amicus curiae, who will evaluate and present relevant information to the court.
“Homebuyers, financial institutions, or builders are welcome to submit their claims and suggestions to the appointed amicus curiae for consideration. The court will not entertain these claims directly unless reviewed by the amicus,” it explained.
On January 20, the Supreme Court instructed a special CBI court to act within two weeks on three chargesheets the agency had filed concerning the alleged “unholy nexus” between banks and developers and to initiate the trial process.
Last September, the apex court permitted the CBI to open six additional cases regarding the same nexus involving homebuyers in real estate projects across Mumbai, Bengaluru, Kolkata, Mohali, and Prayagraj.
The court also authorized the CBI to register 22 cases in July related to homebuyer fraud within the NCR using the subvention scheme.
On April 29, 2025, the Supreme Court mandated the CBI to initiate seven preliminary inquiries against builders in NCR, including Supertech Limited.
The court, concerned about the collusion between development authority officials, banks, and builders defrauding homebuyers, indicated it had identified a prima facie connection between notable banks and builders in various locations including Noida, Gurugram, and others.
Jain identified Supertech Limited as the “main culprit” in deceiving homebuyers, whilst the Corporation Bank allegedly lent more than Rs 2,700 crores to builders through subvention schemes.
Jain’s report highlighted that Supertech Limited alone has secured loans totaling Rs 5,157.86 crores since 1998.
