SC Lets CBI File 6 Fresh FIRs in Builder-Bank Nexus Case

Supreme Court Allows CBI to File Six New FIRs in Builder-Bank Nexus Case, Expands Probe Beyond NCR

Court Finds Evidence of Fraud in Housing Projects Across Major Cities Outside Delhi-NCR

Thousands of Homebuyers Trapped in Subvention Loan Schemes; CBI to Investigate Builders and Banks

By Our Legal Reporter

New Delhi: September 24, 2025: In a major development for thousands of aggrieved homebuyers, the Supreme Court of India has allowed the Central Bureau of Investigation (CBI) to register six new criminal cases against builders and banks accused of collusion in fraudulent housing projects outside the Delhi-National Capital Region (NCR). The order comes after the CBI completed its seventh preliminary enquiry (PE), which revealed evidence of cognizable offences in projects spread across Mumbai, Bengaluru, Kolkata, Mohali, and Prayagraj.

This decision expands the scope of the ongoing investigation into the so-called “unholy nexus” between builders and banks, which has already led to 22 FIRs being filed in relation to projects within the NCR.

Background of the Case

The case originated from petitions filed by over 1,200 homebuyers who alleged that they were cheated under subvention loan schemes. These schemes involved a tripartite agreement between the builder, the bank, and the buyer. Under the arrangement, banks disbursed large sums of money directly to builders, who were supposed to pay the Equated Monthly Instalments (EMIs) until the flats were handed over.

However, many builders defaulted on these payments, leaving unsuspecting homebuyers saddled with EMIs for homes that were never delivered. The Supreme Court, taking note of the widespread fraud, ordered the CBI in April 2023 to conduct seven preliminary enquiries into the matter.

Findings of the CBI

The CBI’s seventh enquiry, which focused on projects outside NCR, confirmed that serious financial irregularities had taken place. According to Additional Solicitor General Aishwarya Bhati, who presented the findings before the bench of Justices Surya Kant, Ujjal Bhuyan, and N Kotiswar Singh, the enquiry revealed that builders and banks had acted in collusion to siphon off funds, leaving buyers in financial distress.

The Supreme Court, after reviewing the sealed cover report, directed the CBI to:

Register six new FIRs under appropriate provisions of law.
Conduct search and seizure operations to gather evidence.
Share copies of the criminal inquiry report with the court-appointed amicus curiae, advocate Rajiv Jain, to assist in further hearings.

Cities and Projects Under Scrutiny

The projects under investigation are spread across five major cities:

Mumbai
Bengaluru
Kolkata
Mohali
Prayagraj

These cases are in addition to the 22 FIRs already registered in relation to projects in Noida, Greater Noida, Gurugram, Ghaziabad, and along the Yamuna Expressway.

The Role of Subvention Schemes

At the heart of the controversy are subvention schemes, which were marketed as buyer-friendly financing models. Under these schemes:

Homebuyers paid only a token amount upfront.
Banks released the bulk of the loan directly to builders.
Builders promised to pay EMIs until possession of the flat.

However, when builders defaulted, banks turned to homebuyers to recover dues, even though the buyers had not received possession of their homes. This left thousands of families paying both rent and EMIs, effectively doubling their financial burden.

Court’s Observations

The Supreme Court has repeatedly expressed concern over the systemic collusion between builders, banks, and even some development authorities. The bench described the arrangement as an “unholy nexus” that exploited ordinary citizens’ dreams of owning a home.

The court has also directed:

The creation of a Special Investigation Team (SIT) with officers from Uttar Pradesh and Haryana.
Coordination with nodal officers from the Reserve Bank of India (RBI), National Housing Bank (NHB), and Real Estate Regulatory Authorities (RERA).
Appointment of forensic auditors through the Institute of Chartered Accountants of India to assist in the probe.

Impact on Homebuyers

For homebuyers, the Supreme Court’s order is a ray of hope. Many have been fighting legal battles for years, with some cases dating back to projects launched in the early 2010s.

Key impacts include:

Legal recognition of fraud: The court’s acceptance of CBI findings validates buyers’ long-standing claims.
Possible recovery of funds: If the CBI establishes criminal liability, affected buyers may have a stronger case for compensation.
Accountability for banks: The role of banks, which disbursed loans without due diligence, is now under direct scrutiny.

Builders and Banks Under the Scanner

While the court has not named all the builders involved, Supertech Ltd. has been identified as a major player in the NCR-related cases. The company alone is linked to more than 21 projects across six cities and loans worth over ₹5,000 crore.

Banks, too, are facing tough questions. Reports suggest that some banks sanctioned loans without proper checks, enabling builders to misuse funds. The CBI is expected to examine whether bank officials acted negligently or were complicit in the fraud.

What Happens Next

The Supreme Court has scheduled the next hearing for October 16, 2025, by which time the CBI is expected to provide updates on the newly registered cases. The agency will also share its findings with the amicus curiae to ensure transparency in the investigation.

The probe is being closely monitored by the court, which has made it clear that it intends to protect homebuyers from further exploitation.

Conclusion

The Supreme Court’s decision to allow six new FIRs marks a significant step in addressing one of India’s largest real estate frauds. By expanding the investigation beyond NCR, the court has acknowledged that the problem is national in scope and not limited to one region.

For thousands of homebuyers who invested their life savings in these projects, the ruling offers renewed hope that justice will finally be served.