Supreme Court Orders CBI Probe into Builder-Bank Nexus Affecting Homebuyers
The Supreme Court has directed the Central Bureau of Investigation (CBI) to probe the alleged nexus between builders and banks, which has led to severe distress among homebuyers due to stalled housing projects. The Court has asked the CBI to submit a detailed proposal within two weeks outlining how the investigation will be conducted, stressing the need for swift and effective action to address the issue.
Builder-Bank Nexus Impacting Homebuyers
A bench of the Supreme Court has highlighted how the alleged builder-bank nexus has caused financial hardships for thousands of homebuyers. Many housing projects remain incomplete while buyers are forced to continue paying Equated Monthly Installments (EMIs) despite not having possession of their homes. The Court expressed concern over the increasing number of cases related to these issues and emphasized the urgency of resolving homebuyers’ grievances.
CBI Investigation Directive
The Court has asked the CBI to prepare a strategy for the investigation, determining whether it should be conducted on a project-wise or area-wise basis. It has stressed that the investigation should be time-bound and efficient to provide relief to affected homebuyers.
Appointment of Amicus Curiae
To ensure a structured legal approach, the Court has appointed former Intelligence Bureau chief Rajiv Jain as amicus curiae to assist in the case. Jain, a former 1980-batch IPS officer now practicing law, has been tasked with preparing a detailed note on the best course of action for the investigation.
Subvention Scheme Complications
The Court’s directive comes in response to complaints from thousands of homebuyers who invested in projects under subvention schemes, particularly in the National Capital Region (NCR). Under these schemes, banks disbursed loan amounts directly to builders, who were responsible for paying EMIs until the flats were handed over to buyers. However, many builders defaulted on payments, leading banks to demand repayment from homebuyers, causing severe financial burdens for those who had not yet received their properties.
Concerns Over Financial Institutions
Some financial institutions have raised concerns about the impact of a CBI-led investigation, fearing it could lead to instability. They suggested that the Reserve Bank of India (RBI) should instead look into the matter. However, the Court observed that the RBI might not have the required expertise to address such issues, reinforcing the need for an independent CBI investigation.
Conclusion
The Supreme Court’s decision to initiate a CBI investigation into the alleged builder-bank nexus is a crucial step in addressing homebuyers’ long-standing concerns. The probe aims to uncover the root causes of project delays and hold accountable those responsible, ensuring better regulation in the real estate and banking sectors to protect homebuyers’ interests.
