Supreme Court Approves CBI to Register 22 Cases in NCR Builder-Bank Fraud
The Supreme Court has granted the CBI permission to register 22 cases related to the fraudulent activities involving builders and banks in the National Capital Region (NCR).
CbiNcrBuilderbank FraudHomebuyersReal EstateReal EstateJul 23, 2025
A bench of Justices Surya Kant and N Kotiswar Singh permitted the CBI to convert the six preliminary inquiries it conducted against various builders and banks into 22 regular cases, equivalent to FIRs, for further investigation.
Those under scrutiny include builders in the NCR and development authorities in Uttar Pradesh and Haryana. The subvention scheme, under which 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, has been at the center of the controversy.
After builders started defaulting on EMIs to banks, in line with the tripartite agreement, banks began demanding EMIs from homebuyers. The bench commended the efforts of the central probe agency in taking up the matter by understanding the gravity and magnitude of the issue, examining over 1,000 persons, and visiting 58 project sites. The court urged the CBI to expedite the investigation and bring the matter to a logical conclusion.
The top court noted that the investigation in the seventh preliminary inquiry registered by the CBI, which covers projects of various builders outside the NCR region in cities like Mumbai, Bangalore, Kolkata, Mohali, and Allahabad, is still underway.
The court was hearing a batch of petitions filed by over 1,200 homebuyers who booked flats under subvention plans in various housing projects in the NCR region, particularly in Noida, Greater Noida, and Gurugram. These homebuyers alleged they were being forced to pay EMIs despite not receiving possession of their flats.
On March 29, the top court allowed the CBI to register five preliminary inquiries into the affairs of builders and projects in the NCR region, including Noida, Greater Noida, Gurugram, Yamuna Expressway, and Ghaziabad. One preliminary inquiry was also registered against real estate major Supertech Ltd, against whom 799 homebuyers have moved the top court through 84 appeals involving projects in eight different cities.
On Tuesday, the court reviewed the report submitted by the CBI in a sealed cover, suggesting that after conducting preliminary inquiries to ascertain the commission of cognizable offenses by builders and financial institutions, 22 regular cases are required for further investigation. The bench accepted the recommendation, ordering the CBI to register regular cases and proceed according to the law.
The bench granted six weeks to the agency for its investigation into the seventh preliminary inquiry over projects outside the NCR. The court directed Additional Solicitor General Aiswarya Bhati, appearing for the CBI, to share portions of the sealed cover report with the amicus curiae advocate Rajiv Jain as deemed necessary.
The court also asked the CBI to examine the report filed by the amicus, terming it an 'eye opener' that highlights the need for transparency in the dealings of development authorities, including RERA, and measures to protect the interests of homebuyers from unscrupulous builders. Referring to the amicus' report, the bench noted that some homebuyers, who are very few in numbers, were offered possession of their flats but refused to take it and instead chose litigation.
'We will not entertain those homebuyers, who are very few in numbers, and would not allow them to misuse the platform of court. We will ask them to move to the appropriate forum and avail whatever legal remedy they have but not this court,' the bench stated. The matter will be next heard in 10-15 days.
On April 29, the top court directed the CBI to register seven preliminary inquiries against builders in the NCR, including Supertech Limited. Frowning upon the collusion of development authorities officials, banks, and builders to dupe homebuyers, the court found a prima facie nexus between renowned banks and builders in Noida, Gurugram, Yamuna Expressway, Greater Noida, Mohali, Mumbai, Kolkata, and Allahabad. Advocate Jain called Supertech Ltd the 'main culprit' in defrauding homebuyers, while Corporation Bank advanced more than Rs 2,700 crore to builders through subvention schemes. The amicus curiae's report revealed that Supertech Ltd alone had secured a loan amount of Rs 5,157.86 crore since 1998.
Frequently Asked Questions
What is the subvention scheme in real estate?
The subvention scheme is a financing arrangement where banks disburse the sanctioned loan amount directly to the builder. The builder is then responsible for paying the EMIs until the flats are handed over to the homebuyers. If the builder defaults on EMIs, the banks can demand the EMIs from the homebuyers.
Why did the Supreme Court allow the CBI to register 22 cases?
The Supreme Court allowed the CBI to register 22 cases to investigate the alleged fraud involving the 'unholy nexus' between builders and banks in the NCR, which has duped homebuyers.
Which areas are being investigated by the CBI?
The CBI is investigating projects in the NCR region, including Noida, Greater Noida, Gurugram, Yamuna Expressway, and Ghaziabad. Additionally, there is an ongoing investigation into projects outside the NCR in cities like Mumbai, Bangalore, Kolkata, Mohali, and Allahabad.
What is the role of the amicus curiae in this case?
The amicus curiae, advocate Rajiv Jain, submitted a report that the court termed an 'eye opener.' The report highlights the need for transparency in the dealings of development authorities and measures to protect homebuyers from unscrupulous builders.
What is the next step in the investigation?
The CBI has been directed to register 22 regular cases and proceed with the investigation according to the law. The court has also granted six weeks to the CBI to investigate the seventh preliminary inquiry over projects outside the NCR.
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