NEW DELHI: Observing that poor homebuyers of the National Capital Region have been taken to ransom by real estate companies and banks which have granted loans to them, Supreme Court on Tuesday said a probe must be carried into the builder-bank nexus and sought a response from CBI to conduct the investigation.
A bench of Justices Surya Kant and N Kotiswar Singh took strong exception to builders, interim resolution professionals (in case of those companies which are facing insolvency proceedings) and banks not furnishing details of delayed housing projects in NCR and stages of their construction, and said an SIT probe was needed to unearth the nexus between builders and banks for harassing homebuyers who have invested their hard-earned money.
The court was hearing petitions filed by thousands of homebuyers, who had booked flats under subvention plans in various housing projects in NCR, alleging that they are being forced by banks to pay EMI even when they were yet to get possession of their flats because of inordinate delay by developers.
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 buyers. As builders started defaulting on EMIs to banks, as per the Tripartite Agreement, the banks initiated action against buyers to recover EMIs.
“People invested their hard-earned money but poor homebuyers have been taken to ransom. SIT should be constituted to probe the nexus between builders and banks, and it will give a report to us. We will ask CBI to register a case,” the bench said and asked CBI to respond to undertake the probe in the case.
The court made it clear that interim resolution professionals would not be spared and they must also be probed. It, however, said those, who acted bonafide and had clean hands, did not need to worry. “We would like the conduct of resolution professionals to be also examined… Every bank must be brought in the investigation,” the bench said. The court shall formulate the questions to be investigated by CBI on the next date.
Advocates Anshul Gupta, Aditya Parolia, Piyush Singh and others, appearing for homebuyers, supported that a probe be done to catch the culprit. At the outset of hearing, the bench was enraged after being informed by the lawyers that information, sought by SC in the previous hearing, had not been filed in court.
The bench had directed petitioners, builders and banks to furnish these information regarding different projects — (i) The status and details of payments made by builders to banks or payments by homebuyers to banks/ builders, (ii) The date of offering possession where the project is stated to have been completed, (iii) The current status of completion of the project (iv) The status of recovery from homebuyers, (v) The amenities advertised by builders at the time of launching projects and the status re: completion thereof, (vi) The status as to whether the builder-cum-developers has undergone CIRP (under IBC) or any other coercive or non-coercive recovery procedure, and the stage of such proceedings, (vii) Whether homebuyers received any relief from statutory authorities like Real Estate Regulatory Authority (RERA). If so, the details of such orders are also furnished.
The apex court had in July last year protected homebuyers and directed that no coercive action be taken against them by banks or builders regarding payment of EMI, and no complaint shall be entertained against them for cheque bounce cases. The aggrieved homebuyers had submitted that they were victims of illegal disbursal of loan by banks directly into the account of builders in violation of RBI guidelines, which are statutory in nature.
“This is a classic case where one rich man (bank/financial institutions) gave money to another rich man (builder). The rich man who received the money (builder) ran away with it without fulfilling his obligations. The rich man who gave the money (bank/financial institutions), disbursed it in violation of the law of the land. The poor man (homebuyer) is now made a victim and is pushed into litigation by the bank when he has not received a single rupee. And, is deprived of his dream home,” one of the petitions said.
They alleged that poor homebuyers were used as a medium to get loan sanctioned and money transferred from bank to a builder. “The homebuyer herein is pushed into the litigation for the amount which he himself has never seen or actually received. The acts of both builder and banks are in violation of tripartite agreement and also in violation of RBI/NHB statutory guidelines…Homebuyers are taken for a ride and there exists no legal framework to address the issues when the insolvency proceedings are initiated against the real estate developer, and banks still keep charging EMIs/Pre-EMIs even when the liability of repayment is of the real estate builder,” it said.
