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The Supreme Court has directed the CBI to investigate Supertech Limited and other NCR-based developers over suspected collusion with banks that has left thousands of homebuyers burdened with EMIs for undelivered projects. Highlighting a "prima facie unholy nexus," the court noted that developers secured massive loans under subvention schemes, where builders were to pay EMIs until possession—but defaulted, passing the burden to buyers. Supertech alone borrowed over INR 5,157 crore. The court ordered seven preliminary enquiries, forming an SIT with support from state DGPs, RBI, ICAI, and urban authorities. This landmark move may lead to stricter oversight and accountability in India’s real estate financing.
The Central Bureau of Investigation (CBI) was recently ordered by the Supreme Court to conduct a comprehensive investigation into Supertech Limited and other real estate developers operating in the National Capital Region (NCR). This action follows growing concerns regarding an alleged nexus between builders and banks, which has left thousands of homebuyers financially and emotionally distressed due to undelivered housing projects and loan repayment issues. Advertisement
A bench comprising Justices Surya Kant and N Kotiswar Singh observed what appeared to be a "prima facie unholy nexus" between several prominent real estate developers and leading financial institutions. The court noted that this pattern was not limited to Delhi NCR but extended to cities like Mumbai, Kolkata, Mohali, and Allahabad. The bench underlined the need for a structured investigation into how developers were able to secure large volumes of loans through subvention schemes arrangements in which banks disbursed up to 70% of the loan amount to builders, who were then supposed to service the Equated Monthly Instalments (EMIs) until project possession.
However, when builders defaulted on these payments, the responsibility to repay EMIs fell upon homebuyers, despite significant delays or even abandonment of the construction. In Supertech’s case alone, the company reportedly borrowed over INR 5,157.86 crore from various banks since 1998. Corporation Bank (now merged into Union Bank of India) alone disbursed over INR 2,700 crore to the developer under such schemes.
The Supreme Court instructed the CBI to register seven preliminary enquiries (PEs), with a focus on the Supertech Group as the initial priority. The court’s objective is to identify systemic failures, including the possible roles of bank officials and regulatory authorities in facilitating or overlooking these transactions.
To strengthen the probe, the bench directed the Directors General of Police (DGPs) from Uttar Pradesh and Haryana to nominate competent officers to form a Special Investigation Team (SIT). Additionally, the court ordered nodal officers to be appointed from the Greater Noida Authority, Noida Authority, the Ministry of Housing and Urban Affairs, the Institute of Chartered Accountants of India (ICAI), and the Reserve Bank of India (RBI) to assist the investigation.
Emphasising the severity of the matter, the court has decided to monitor the investigation’s progress on a monthly basis. This move indicates the judiciary’s commitment to ensuring accountability not just among developers, but also among financial institutions and government bodies that may have facilitated questionable practices.
The Supreme Court’s ruling aligns with growing concerns in India’s real estate market, especially in the wake of multiple stalled and abandoned housing projects over the past decade. Supertech itself has faced insolvency proceedings, and its infamous twin towers in Noida were demolished in 2022 following court orders citing illegal construction.
If the investigation confirms widespread malpractice, it could lead to stricter regulatory controls on financing mechanisms and more cautious lending practices by banks. As the judiciary sharpens its oversight, this probe may serve as a turning point in restoring public faith in both the housing market and institutional integrity.
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