CBI Files Six FIRs Against Builders in Subvention Scheme Scam

The Central Bureau of Investigation (CBI) has taken significant steps to address the fraudulent 'subvention scheme' that has affected thousands of home buyers across India. On Saturday, the CBI carried out searches at twelve locations and filed six new cases to probe the nexus between builders and officials of financial institutions. These raids were conducted in Kolkata, Bengaluru, and Mumbai.

With these latest actions, the CBI has expanded its investigation across the country, as numerous home buyers have faced enormous hardships due to the 'subvention scheme.' In this scheme, a tripartite agreement was signed between the builder, home buyers, and financial institutions. The financial institution transferred the loan amount to the builder, who was supposed to pay the Equated Monthly Installments (EMIs) on these loans until the flat was handed over to the buyer. However, several builders failed to complete the construction projects and defaulted on EMIs, leaving the financial institutions to directly demand payments from the buyers who had not even received possession of their homes.

The CBI stated, “The Central Bureau of Investigation has registered six cases against different builders in Kolkata, Bengaluru, and Mumbai, and unknown officials of various financial institutions, in compliance with the directions of the Supreme Court. Searches were conducted at 12 premises in Kolkata, Mumbai, and Bengaluru.”

The names of the six companies involved in the subvention scheme are: 1. Ithaca Estate Private Limited, registered office in Bengaluru 2. LGCL Urban Homes (India) LLP, registered office in Bengaluru 3. Ozone Urbana Infra Developers Pvt. Ltd, registered office in Bengaluru 4. Shashwati Realty Pvt. Ltd., registered office in Mumbai (Project in Bengaluru) 5. MKHS Housing LLP, Kolkata 6. ACME Realities Pvt. Ltd, Mumbai

The probe agency highlighted that thousands of home buyers across India have been cheated and coerced by builders and real estate developers in collusion with financial institutions. Writ petitions were filed in the Apex Court to highlight the coercion and hardships faced by the home buyers.

The Supreme Court, observing the unholy nexus between builders and financial institutions in cheating home buyers through the ‘subvention scheme’ of home loans, directed the CBI to register seven Preliminary Enquiries in April 2025. Following the Supreme Court's directions, the CBI filed seven Preliminary Enquiries and submitted a status report on six of them, which were related to builders in the National Capital Region (NCR).

In July, the CBI carried out searches at 47 locations across the NCR and filed 22 cases against top real estate developers and builders in the region. The Enforcement Directorate (ED) has also filed 22 separate money laundering cases stemming from the CBI FIRs.

Upon the completion of the 7th Preliminary Enquiry, which was against various builders outside the NCR, the CBI submitted a status report to the Supreme Court. After reviewing the report, the Supreme Court directed the CBI to register six regular cases against different builders in Kolkata, Bengaluru, and Mumbai, along with unknown officials of financial institutions.

This ongoing investigation aims to bring accountability and justice to the thousands of home buyers who have suffered due to the fraudulent practices of builders and financial institutions.