SC orders CBI probe into nexus between banks and builders across major cities

The Supreme Court has instructed the CBI to launch seven preliminary investigations into suspected collusion between major banks and real estate developers across several Indian cities. This action aims to protect defrauded homebuyers in areas like Noida, Gurugram, and Mumbai. The court noted evidence suggesting a nexus between financial institutions and builders, leading to financial exploitation.

Supreme Court of India NEW DELHI: The Supreme Court on Tuesday directed the Central Bureau of Investigation (CBI) to register seven preliminary enquiries (PEs) into suspected collusion between prominent banks and real estate developers across multiple cities. The top court also directed the UP, Haryana DGPs to give a list of DSPs, inspector, constables to the CBI to constitute a special investigation team (SIT), reported news agency PTI. The court order aims at protecting homebuyers in cities including Noida, Gurugram, Greater Noida (Yamuna Expressway), Mohali, Mumbai, Kolkata and Allahabad.

The apex court observed that there was prima facie evidence of a nexus between reputed financial institutions and builders, which facilitated large-scale wrongdoing and financial exploitation of thousands of homebuyers. SC had in July last year protected homebuyers and directed that no coercive action be taken against them by banks or builders regarding payment of EMIs and no complaint shall be entertained against them for cheque bounce cases. The aggrieved homebuyers said they were victims of illegal disbursal of loans by banks directly into the account of builders in violation of RBI guidelines, which are statutory in nature.

“This is a classic case where one rich man (bank/financial institution) gave money to another rich man (builder). The rich man who received the money (builder) ran away with it without fulfilling his obligations. The rich man who gave the money (bank/financial institution) disbursed it in violation of the law of the land.

The poor man (homebuyer) is now made a victim and is pushed into litigation by the bank when he has not received a single rupee. And is deprived of his dream home,” one of the petitions said..