The Supreme Court has expressed firm concerns regarding the alleged nexus between banks and builders and has committed to initiating a Central Bureau of Investigation probe into the homebuyers’ complaints. A group of homeowners approached the court claiming the banks forced them to pay EMIs even though they have not received the possession of flats due to delays from builders and developers.
“We are not going to say that any institution is good or bad,” remarked Justice Surya Kant, who headed a two-judge bench hearing the case.
“We will definitely conduct a probe by the CBI. This is very clear. Thousands of people are crying. We can’t wipe their tears but we can certainly address their problems. Some very effective remedial action must be taken within a time-bound period,” he reiterated. The Central agency has been asked to file a plan regarding how it intends to handle the matter.
In what could be termed a landmark judgment in July 2024, the Supreme Court directed that homebuyers in the National Capital Region who had not been delivered possession of their flats had protection from any coercive action, including EMI recovery.
Yet, that order is far from getting implemented. Moreover, the homeowners claim that loan amounts were directly disbursed into the accounts of the builders/developers, thus violating the RBI guidelines.
There were also allegations about the homebuyers being used as a medium to get the loans sanctioned. It was alleged that when the buyers resisted, the banks acted against them.
“We may not certify a single bank free from doubt…we have seen their functioning…you see the conduct of public institutions!” Justice Kant said.
Justice Kant was firm on the issue when Singhvi argued that if a builder happened to go bankrupt that was not his fault. “Your fault is that knowing not a brick has been laid at the site, you released 60 percent! How can this be without quid pro quo!?”
Mr Singhvi suggested interest might be relaxed until possession for the same case. That suggestion was brushed aside by the court.
“This is not going to address the larger issue. It’s not going to cure the hurt the entire system is suffering from. Lakhs and lakhs of people…the Supreme Court is actually embarking on the everyday injustice against these people,” said Justice Kant.
“We don’t want any reluctance. We want to go into the root…we have zero tolerance. We will request the Amicus (Curiae) to assist,” the judge remarked.
Seeing the sheer number of such cases, the court decided to appoint out an amicus curiae. The case in question would be heard in two weeks.
The Supreme Court had serious concerns about the predicament wherein thousands of individuals have become vulnerable on accounts of fraud and mismanagement. It also mentioned a possible CBI investigation into the corrupt practices reigning in the real estate sector.
The bench that handled this case said that many people were financially ruined due to the immoral conduct of the developers. Furthermore, the court stressed the importance of more stringent regulations to avoid similar situations in the future.
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