In a significant judicial intervention, the Supreme Court has pledged a Central Bureau of Investigation (CBI) probe into allegations highlighting a collaboration between banks and builders.
This assurance comes as a response to grievances from a group of homeowners who have petitioned the court, alleging that banks are coercing them to pay EMIs despite delays in obtaining possession of their flats.
Justice Surya Kant, presiding over a two-judge bench handling the matter, emphasized that while the court refrains from labeling any institution as inherently good or bad, there is a clear necessity for a CBI investigation.
"Thousands of people are crying. We can't wipe their tears, but we can address their issues. Something very effective has to be done in a time-bound manner," he stated. The CBI has been directed to present a plan outlining their approach to the investigation.
In a landmark decision in July 2024, the Supreme Court had ordered that no coercive actions, including EMI recoveries, should be executed against homebuyers in the National Capital Region (NCR) who have not yet received possession of their properties. However, this order remains largely unimplemented.
The homeowners further claim that banks have unlawfully released loan funds directly to builders or developers, contravening Reserve Bank of India (RBI) guidelines.
Allegedly, homebuyers were manipulated as intermediaries to secure these loans, and when they objected, banks initiated actions against them.
Justice Kant expressed skepticism regarding the operations of banks involved, stating, "We may not certify a single bank free from doubt... You see the conduct of public institutions!"
During the proceedings, when Abhishek Manu Singhvi, representing the financiers, argued against liability if a builder goes insolvent, Justice Kant retorted, "Your fault is that knowing not a brick has been laid at the site, you released 60 per cent! How can this be without quid pro quo?"
Mr. Singhvi proposed that banks could halt interest charges until possession is delivered, a suggestion the court dismissed.
Justice Kant underscored that the proposal would not resolve the systemic issues affecting countless people and that the Supreme Court consistently addresses these plights.
Expressing zero tolerance for reluctance in addressing these concerns, Justice Kant announced the appointment of an amicus curiae to assist with the extensive caseload. A follow-up hearing is scheduled in two weeks, promising further judicial examination of the matter.