The Supreme Court on Tuesday expressed concerns over alleged collusion between banks and real estate developers in various housing projects financed through subvention schemes in Noida, Greater Noida and Gurugram..The Bench of Justices Surya Kant and N Kotiswar Singh said that not a single bank seems to be free from doubt and contemplated ordering a probe by the Central Bureau of Investigation (CBI).“Not a single bank is free from doubt. We have seen their functioning and the kind of hobnobbing that they do. Before knowing whether a single brick has been laid the banks have released payments," the Bench remarked.The Court eventually proceeded to direct the CBI to submit a detailed investigation proposal. The Court was hearing petitions filed by homebuyers alleging that defaults and project delays by builders under tripartite agreements have burdened buyers financially..The dispute concerns housing projects across Noida, Greater Noida, Gurugram and other nearby regions financed under subvention schemes - a tripartite agreement among banks, builders and homebuyers.Under these schemes, homebuyers typically pay a small initial percentage (5-10%), while banks release the rest of the loan directly to the developers.The petitioners moved the Court alleging severe financial hardship due to defaults and project delays by builders. Banks, despite builders’ defaults, began demanding loan repayments from homebuyers who were yet to receive possession of their homes, it was claimed.The homebuyers initially approached the Delhi High Court which directed them to approach the Real Estate Regulatory Authority (RERA), stating that alternative remedies were available and the issue was essentially contractual..The Supreme Court, while taking cognizance of the hapless situation of the homebuyers, pointed at a possible collusion between the banks and the developers/builders. The Court noted that while the banks were demanding payments from the homebuyers, most of them had not received possession of their purchased units and in some cases the development projects were still under construction, incomplete or the construction had not even commenced.The Bench took severe exception to the banks' actions and mooted a CBI probe. .Senior Advocate Abhishek Manu Singhvi, appearing for one of the banks, argued that all financial institutions should not be painted with the same brush. He said there are both “good apples and bad apples" but the Bench remained unconvinced, It batted for a thorough and impartial investigation to unearth the truth. .To assist the investigation further, the Court appointed former Intelligence Bureau Director Rajiv Jain, who previously served as a member of the National Human Rights Commission (NHRC), as Amicus Curiae.Recognizing the urgency and scale of the issue, Justice Kant remarked:“So many helpless people are there. Something has to be done in a timely manner. A huge section of society is involved.”.The Bench ultimately directed the CBI to submit a detailed investigation proposal within two weeks. Jain was asked to submit recommendations for an effective probe. .The matter is tentatively scheduled for hearing on April 29..[Read Live Coverage].[Read Order]
