CBI alleges 6 instances of bank-builder nexus in Supreme Court

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.

Earlier, the CBI had registered seven preliminary enquiries (PEs) based on the amicus report. In July, the court allowed the agency to convert six PEs into 22 regular cases (RCs) for projects in Delhi-NCR and gave six weeks to complete the probe into the remaining PE that covers the subvention scheme irregularities involving projects other than Supertech that are situated outside Delhi-NCR