Supreme Court clears CBI to probe builder-bank nexus cases outside Delhi-NCR

The SC has allowed CBI to register six criminal cases linked to alleged nexus between banks and builders in subvention schemes for projects outside Delhi-NCR

The Supreme Court on Tuesday allowed the Central Bureau of Investigation (CBI) to register six criminal cases linked to the alleged nexus between banks and builders in subvention schemes for residential projects outside Delhi-NCR. This comes two months after the CBI registered 22 cases related to housing projects within Delhi-NCR.

The court had ordered a CBI inquiry in April after a report by court-appointed amicus curiae advocate Rajiv Jain revealed that builders had siphoned off large sums from bank loans under the subvention scheme. (Representational image)

The order was passed by a bench headed by Justice Surya Kant in a case filed by homebuyers of various housing projects. The court had ordered a CBI inquiry in April after a report by court-appointed amicus curiae advocate Rajiv Jain revealed that builders had siphoned off large sums from bank loans under the subvention scheme.

A subvention scheme is a tripartite arrangement between the builder, homebuyer, and bank, under which the bank releases loans to the builder, who pays the EMIs until a specified cutoff or until possession of the flat is handed over. The Supreme Court is hearing 174 appeals filed by homebuyers who had approached forums including the Real Estate Regulatory Authority (Rera), consumer courts, and the Delhi high court, which dismissed their pleas in 2022.

On Tuesday, additional solicitor general (ASG) Aishwarya Bhati told the bench that the probe into the seventh PE was complete and six RCs needed to be registered. The bench, also comprising justices Ujjal Bhuyan and N Kotiswar Singh, said, “The ASG informs us that PE by CBI in terms of directions issued by this court is complete. As per that inquiry, cognizable offences have been made out. The CBI will register cases under the appropriate provisions of law and investigate the same.”

The court further directed that once the search and seizure operations are complete, the CBI must provide a copy of the report to the amicus, Rajiv Jain, ahead of the next hearing on October 16.

The CBI has filed its status report in a sealed cover, as per the Supreme Court’s April 29 order in petitions filed by aggrieved homebuyers. In its earlier submission, the agency had detailed findings from seven preliminary enquiries into the alleged builder-bank nexus in housing projects across the country.