Supertech ‘main culprit’ in duping homebuyers: Advocate tells SC; court points to builder-bank nexus

The SC was hearing a batch of petitions filed by over 1,200 homebuyers, who booked flats under subvention plans in various housing projects in NCR, especially Noida, Greater Noida and Gurugram, alleging that they were being forced by banks to pay EMIs despite no possession of flats.

On March 4, the SC had said that “it may be necessary to constitute a special investigation team (SIT) to uncover the nexus… with respect to the development projects where the homebuyers have paid substantial amounts and where the development projects have not even been launched, completed construction, or begun construction”. On March 18, it had sought a likely roadmap for the probe from the CBI.

The CBI, in its affidavit had suggested that “with a view to arrive at a finding as to what actually transpired; what was the exact modus operandi of the builders; if and how they colluded with the financial institutions; and what was the exact criminality on the part of the builders or the financial institutions, it is necessary that seven preliminary enquiries are registered…”

Accepting this on Tuesday, the SC ordered, “We direct the CBI to register seven preliminary Inquiries in the manner as suggested in the affidavit filed on its behalf.”

The court added that while one of the enquiries will look into projects launched by Supertech Limited; five enquiries will look into projects at Noida, Greater Noida, Yamuna Expressway, Gurugram, and Ghaziabad; and the seventh enquiry will look into projects outside NCR — Mumbai, Bengaluru, Kolkata, Mohali and Allahabad — in which Supertech Limited is not the builder.

The bench said, “This batch of cases, comprising more than 170 petitions, have been filed by over 1,200 homebuyers/borrowers. They have raised an issue of paramount importance – 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, who are now bearing the brunt of such failures.”

Keeping in view the requirement of staff as expressed by the CBI in its affidavit, the SC directed the UP and Haryana DGPs to give a list of DSPs, inspector, constables to the agency within a week to constitute the SIT. “The lists of these shortlisted police officers shall be forwarded to the Director, CBI, who shall… be free to shortlist the suitable police officers…,” the SC said.

It further directed the CEOs/administrators of Greater Noida Authority, Noida Authority, Yamuna Expressway Industrial Development Authority, Ghaziabad Development Authority, Haryana Shahari Vikas Pradhikaran, and Haryana State Industrial and Infrastructural Corporation; secretary (Housing and Urban Affairs), the Reserve Bank of India, and UP and Haryana’s Real Estate Regulatory Authority to notify one nodal officer within a week to extend necessary assistance to the SIT.

Advocate Rajiv Jain, the amicus curiae in the matter, called Supertech the “main culprit” in defrauding homebuyers whereas Corporation Bank advanced more than Rs 2,700 crore to builders through subvention schemes.

The court was informed that Supertech had 21 projects in six cities with agreement with 19 banks with 800 aggrieved homebuyers. The report of the amicus revealed Supertech alone had secured a loan amount of Rs 5,157.86 crore since 1998.

Under the subvention scheme, banks disburse the sanctioned amount directly to the accounts of builders, who are then required to pay EMIs on the sanctioned loan amount until flats are handed over to homebuyers. After builders started defaulting on EMIs to banks, as per the tripartite agreement, the banks sought EMIs from the homebuyers.

The apex court previously said thousands of homebuyers were affected by the subvention scheme, where banks paid 60-70% of the home loan amount to the builders without projects being completed within the stipulated time.