“CBI to Probe ‘Builder-Bank Nexus’ in NCR: Supreme Court Orders 7 Preliminary Enquiries, Begins with Supertech”
Kiran Raj
The Supreme Court Division Bench of Justice Surya Kant and Justice Nongmeikapam Kotiswar Singh has issued a series of far-reaching directions while hearing over 170 petitions filed by aggrieved homebuyers. The Court ordered the Central Bureau of Investigation (CBI) to initiate seven Preliminary Enquiries into the alleged collusion between banks, housing finance corporations, and real estate developers under subvention schemes. It also directed authorities including the Reserve Bank of India, Real Estate Regulatory Authorities, and urban development bodies to appoint nodal officers and cooperate fully. In an additional direction, the Court ordered that a residential unit in a contested project be reserved for an applicant, and issued a show cause notice on whether contempt proceedings should be initiated, returnable by 13 May 2025.
The matter stems from a group of petitions filed by more than 1200 homebuyers across 174 Special Leave Petitions. These petitions challenge the alleged systemic failure of statutory authorities and financial institutions in regulating subvention schemes that led to large-scale financial distress among buyers.
According to the record, the case arose from real estate transactions involving tripartite agreements among banks, homebuyers, and builders. Under these subvention schemes, developers agreed to bear EMI/pre-EMI payments until possession was delivered. These agreements were popularized between 2013 and 2015. However, defaults by developers on EMI commitments began surfacing from 2018 onwards. With no delivery of possession and project delays, banks began recovery proceedings directly against homebuyers.
Aggrieved buyers first approached the High Court of Delhi, and upon failing to secure relief, moved the Supreme Court under Article 136 of the Constitution. Simultaneously, other groups of buyers directly invoked writ jurisdiction before the Supreme Court for similar relief.
The petitions collectively sought investigation into the collusion between banks and developers, alleging that banks disbursed large loan amounts without ensuring construction progress or compliance with RBI/HFC guidelines.
The Supreme Court had previously called upon the Additional Solicitor General and the CBI to provide a roadmap for an investigation. Rajiv Jain, a former Director of the Intelligence Bureau, was appointed as Amicus Curiae to assist the Court. He submitted a detailed report identifying the builders and financial institutions involved.
A significant portion of the focus was on M/s Supertech Ltd., which reportedly had 21 projects across six cities and had entered into subvention agreements with 19 different banks and HFCs. The report revealed Supertech alone had received loans exceeding ₹5,157.86 crores since 1998.
The report also documented that 84 of the 174 SLPs (filed by 799 petitioners) pertained to Supertech Ltd., whose projects were located in 8 different cities. It recommended initiation of a Preliminary Enquiry (PE) specifically against Supertech Ltd., followed by five separate PEs for the NCR region and one for projects outside the NCR.
Based on these findings, the Amicus Curiae urged the Court to direct a structured inquiry under the CBI to ensure transparency and accountability.
The Court stated: “We find from the record that the Corporation Bank alone has released a loan of ₹2,477.54 crores. Consequently, we direct the Corporation Bank to make payment of the honorarium and all other expenses... to the learned Amicus Curiae and his staff...”.
On the composition of the investigative body, the Court stated:
“The Director, Central Bureau of Investigation will constitute the requisite Special Investigation Teams involving CBI Officials as well as those taken from the States’ police on deputation, besides other experts.”
With regard to subvention schemes, the Bench observed: “The common background... is that the builders/developers advertised the ‘subvention schemes’ assuring payment of EMIs of the home-loans... while these projects were launched in 2013-2015, most of the builder/developers started defaulting in 2018-2019.”.
Commenting on regulatory failure, the Court recorded: “They have raised an issue of paramount importance re: the systematic failure of statutory and government authorities to discharge their functions, circumvention of regulatory framework by Banks and Housing Financial Corporations, and the resultant illicit benefits said to have been drawn by builders/developers at the cost of the homebuyers.”
Referring to forensic scrutiny, the Bench noted: “The President, Institute of Chartered Accountants of India is directed to deploy three Chartered Accountants, who are well conversant with the process of forensic audit, and place them at the disposal of CBI to assist the Bureau/SIT in the matter...”.
In terms of institutional coordination, the Bench ordered: “The Chairpersons of Real Estate Regulatory Authorities of U.P. and Haryana are directed to do the needful within one week, and send the requisite information to the Director, CBI.”
The Supreme Court issued a series of structured directions aimed at addressing both immediate concerns and the broader systemic issues raised in the matter. One of the most notable directions was the issuance of a show cause notice concerning potential contempt of court. The Court stated, “Let a show cause notice be issued as to why Contempt of Court proceedings be not initiated, keeping in view the averments made in the application.” The notice is made returnable on 13 May 2025, signifying the Court’s intention to scrutinize compliance with its prior orders.
To safeguard the interests of a specific applicant, the Court further directed that “the residential unit in the project in question shall be kept reserved for the applicant(s),” thereby preserving their claim and preventing any potential third-party rights from being created during the pendency of proceedings.
A central component of the Court’s directive involved criminal investigative measures. Acting on recommendations submitted by the Amicus Curiae, the Bench instructed the Central Bureau of Investigation to “register seven Preliminary Enquiries, in the manner as suggested in the affidavit filed on its behalf.” These are to be conducted across multiple real estate projects and jurisdictions, with specific reference to alleged bank-builder collusion under subvention schemes.
In support of the CBI's effort, the Bench directed the Director Generals of Police in Uttar Pradesh and Haryana to identify and forward names of suitable officers to assist in the investigations. Specifically, the Court ordered, “The Directors General of Police of the States of U.P. and Haryana are directed to shortlist at least 12 and 5 Deputy Superintendents of Police respectively... and forward the same to the CBI within a week.”
Recognizing the role of the Amicus Curiae and the administrative burden incurred, the Court also ordered financial support for legal assistance rendered. “The Corporation Bank is directed to make payment of the honorarium and all other expenses and payments... to the learned Amicus Curiae and his staff, w.e.f. 01.03.2025.” The Court clarified that these costs shall ultimately be reimbursed by the respective developers: “The payments as directed above shall eventually be borne by the developer-cum-builders.”
For coordination and documentation purposes, the Court instructed the Registry to furnish digital copies of all case materials to the Additional Solicitor General of India. These are to be forwarded to the CBI to facilitate further inquiry. Additionally, the Bench directed that “notice be issued in all such tagged matters in which notice has not been issued so far,” setting the next hearing date for 22 July 2025, when the consolidated matters will be taken up for further consideration.
Lastly, in respect of two petitions—SLP(C) No. 11931/2023 and SLP(C) No. 10173/2023—the Court recorded that counsel for the petitioners sought permission to withdraw. Allowing the request, the Bench ordered: “The special leave petitions, accordingly, [are] dismissed as withdrawn.”
Advocates Representing the Parties:
For the Petitioners: Mr. Aditya Parolia, Mr. Akshay Srivastava, Mr. Piyush Singh, Mr. Suryansh Vashisth, Mr. Mohammed Imran Ahmed, Ms. Avani Sharma, Ms. Sakshi Arora, Mr. Ranbir Singh Yadav, Mr. Rakesh Dahiya, Mr. Akshat Jain, Mr. Praveen Kumar, Mr. Raj Kishor Choudhary, Mr. Shakeel Ahmed, Ms. Pratibha Singh, Mr. Vikram Patralekh, Mr. Rajeev Mishra, Mr. Suprateek Neogi, among others.
For the Respondents: Mr. Rajiv Jain, Advocate (Amicus Curiae), Mr. V. Singh, Mr. Deepak Goel, Mr. Sahil Nagpal, Mr. Nitish Massey, Mr. Pushkar Anand, and others from various legal teams and AORs representing state and institutional parties.
Case Title: Himanshu Singh & Ors. v. Union of India & Ors.
Case Number: SLP(C) No. 7649/2023
Bench: Justice Surya Kant and Justice Nongmeikapam Kotiswar Singh
[Read/Download order]
