SC cracks down on bank‑developer collusion in subvention scheme scam
The Supreme Court on Tuesday asked a special CBI court in New Delhi to take cognisance within two weeks of three chargesheets filed by the federal agency on the “unholy nexus” between banks and developers to dupe homebuyers in the NCR, and proceed with the trial. A bench of Chief Justice Surya Kant and Justices Joymalya Bagchi and Vipul M Pancholi was apprised by Additional Solicitor General Aishwarya Bhati, who appeared in the matter for the CBI, that substantial progress in the investigation will be made by the federal agency in all the 25 cases of homebuyers by March.
In July last year, the court had allowed the Central Bureau of Investigation (CBI) to register 22 cases over the “unholy nexus” between banks and developers to dupe homebuyers in the National Capital Region (NCR) by using the subvention scheme. Under the scheme, banks disburse the sanctioned loan amount directly to the accounts of builders, who are then required to pay monthly instalments on the amount until flats are handed over to homebuyers. After builders started defaulting on the instalments, the banks demanded the money from homebuyers, in line with the tripartite agreement.
On Tuesday, the bench, hearing the pleas of more than 1,200 hassled homebuyers, passed a fresh set of directions after taking note of the submissions of Bhati and amicus curiae (friend of the court) Rajiv Jain.
Bhati said the CBI has filed three chargesheets in Delhi’s Rouse Avenue court, but their cognisance is yet to be taken. The bench asked the trial court to take cognisance of the chargesheets in two weeks and proceed with the cases expeditiously. It asked the CBI to share the chargesheets’ copies with the amicus curiae, who, in turn, will apprise the bench of the status and fairness of the probe conducted so far.
The apex court also asked 23 banks and financial institutions, which are involved as bankers in the cases, to deposit Rs.10 lakh each in a special account of the Union Bank of India for reimbursing the expenses incurred by the amicus curiae and his office in assisting the bench. Earlier, the bench had allowed the CBI to convert the six preliminary enquiries it had conducted against various builders and banks into 22 regular cases, equivalent to FIRs for cognisable offences, for further investigation. Later, the number of cases rose. Those under the scanner include builders in the NCR and development authorities in Uttar Pradesh and Haryana.
The bench had appreciated the CBI’s efforts in taking up the matter after realising the gravity and magnitude of the issue, examining more than 1,000 people and visiting 58 project sites, and asked it to expeditiously conclude the investigation and take the matter to its logical conclusion. The court had noted that the investigation in the seventh preliminary enquiry registered by the CBI over projects of various builders except Supertech Limited falling outside the NCR — in Mumbai, Bengaluru, Kolkata, Mohali, and Allahabad — was still on.
The apex court was hearing a batch of petitions filed by more than 1,200 homebuyers, who had booked flats under the subvention plans in various housing projects in the NCR, especially in Noida, Greater Noida, and Gurugram, alleging that they were being forced by banks to pay instalments despite no possession of flats. On April 29, 2025, the apex court directed the CBI to register seven preliminary enquiries against builders in NCR, including Supertech Limited.
Frowning upon the collusion of development authorities’ officials, banks, and builders to dupe homebuyers, the court said it has found a prima facie nexus between renowned banks and builders in Noida, Gurugram, Yamuna Expressway, Greater Noida, Mohali, Mumbai, Kolkata, and Allahabad. Amicus Curiae Rajiv Jain had called Supertech Limited the “main culprit” in defrauding homebuyers, whereas the Corporation Bank had advanced more than Rs.2,700 crore to builders through subvention schemes. The amicus’ report has revealed that Supertech Limited alone has secured a total loan amount of Rs.5,157.86 crore since 1998.
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