Supreme Court Orders CBI to Probe Major 'Builder-Bank Nexus' After Homebuyers Forced to Pay EMIs Without Getting Flats

New Delhi: The Supreme Court on Tuesday directed the CBI to initiate multiple preliminary inquiries into an alleged “builder-bank nexus” involving homebuyers who had to continue paying EMIs despite not receiving possession of their flats. The court’s ruling followed a plea filed by numerous homebuyers who complained of delays in possession of their properties, leading to financial hardships.

The bench of Justices Surya Kant and N. Kotiswar Singh ordered the Central Bureau of Investigation to probe projects developed by M/s Supertech Limited in the Delhi NCR region and other projects by different builders across the country.

Homebuyers' Alleged Unfair Practices and Defaults by Builders

The issue arose from complaints by homebuyers who had been forced to continue paying EMIs even though they had not received possession of their flats, a delay caused by the builders. 

According to the petitioners, the EMIs were being paid to banks under an arrangement where builders were supposed to cover the initial payments under the subvention scheme. 

Under this scheme, banks provided loans to homebuyers while builders were required to pay the EMIs until possession was handed over. 

However, when builders defaulted on the payments, banks initiated recovery proceedings against the homebuyers, further complicating their situation.

Court Orders Multiple Preliminary Inquiries by CBI

The Supreme Court's bench instructed the CBI to conduct a thorough investigation into the issues raised by the homebuyers, particularly focusing on the nexus between builders and banks. 

The court's ruling came after claims of financial exploitation and unfair practices by the builders and the banks.

The inquiry will specifically examine the projects launched by Supertech Limited in Delhi NCR and other builders operating outside the NCR region. 

The homebuyers have alleged that such delays, combined with builders defaulting on payments, have left them struggling to pay loans for properties they had yet to receive.

Subvention Scheme and Its Role in the Alleged Nexus

One of the key aspects of the case highlighted by the petitioners was the subvention scheme, an agreement where banks issue loans for property purchases, but the builders are responsible for making the EMI payments until the possession of the flats is completed. 

Homebuyers alleged that the builders’ failure to meet their obligations under this agreement led to significant financial distress as banks started recovering EMIs from them, despite the fact that they were not living in the properties.

The homebuyers had sought the court’s intervention, arguing that they were caught in a vicious cycle of payments for homes they never received, and many had requested relief from such unfair financial burdens.