SC Allows CBI to File 22 FIRs Against Banks and Builders Loan Scam.

Unmesh Gujarathi
Sprouts News Exclusive
Contact: +91 9322755098

The Supreme Court has allowed the CBI to register 22 FIRs against banks and builders over subvention scheme fraud in stalled housing projects. Based on a detailed probe and supported by findings of the Sprouts News Investigation Team (SIT), the case exposes deep-rooted collusion and regulatory lapses in the real estate sector.

In a major boost to financial accountability in India’s real estate sector, the Supreme Court has allowed the Central Bureau of Investigation (CBI) to register 22 criminal cases against banks and builders involved in stalled housing projects under the subvention scheme. The apex court observed “substantial evidence of an unholy nexus” uncovered during the ongoing investigation.

This decision follows a sustained campaign by victims and whistleblowers, as well as consistent coverage and document-backed investigations by the Sprouts News Investigation Team (SIT). The court appreciated the progress made in uncovering misuse of subvention loan structures and directed that the probe continue without delay.

In its interim sealed report submitted before a bench of Justices Surya Kant and N Kotiswar Singh, the CBI highlighted glaring financial and legal irregularities. The agency had launched seven preliminary enquiries (PEs) focused on real estate hubs including Noida, Greater Noida, Gurugram, Ghaziabad, and the Yamuna Expressway region.

One PE was exclusively dedicated to Supertech, which ran 21 subvention-linked projects in six cities. Five other PEs examined additional NCR projects, while one focused on states beyond Delhi-NCR.

The CBI has completed six PEs and sought six more weeks for the final one. Based on current findings, the agency requested permission to register 22 Regular Cases (RCs)—a request the court granted.

Under the subvention scheme, banks, homebuyers, and builders sign a tripartite agreement. Banks disburse the entire loan upfront to the builder, who promises to pay EMIs until the handover of possession. However, several developers allegedly defaulted while still receiving full disbursements—leaving buyers trapped in debt.

Multiple builders, including Supertech, Saha Infratech, and Logix City Developers, are named in the petition. Many homebuyers allege they were harassed by banks despite not receiving their flats on time.

The bench noted that the CBI Special Investigation Team, led by SP Ram Singh, examined over 1,000 witnesses, visited 58 real estate sites, and reviewed “voluminous documentation.” The Sprouts SIT has consistently reported on the misuse of this model, often citing the same developer-bank collusions now confirmed in CBI’s findings.

A court-appointed amicus curiae, Rajiv Jain, a former Intelligence Bureau Director, submitted damning evidence in a separate report. He revealed that Supertech had entered subvention agreements with 19 banks and Housing Finance Companies (HFCs). These included:

•Indiabulls (now Sammaan Capital)

•Punjab National Bank Housing Finance

•Dewan Housing Finance

•HDFC Housing Finance

•ICICI Bank

•L&T Housing Finance

•Aditya Birla Housing Finance

•India Infoline Housing Finance

Between 1998 and now, Supertech is estimated to have taken loans amounting to ₹5,158 crore. Jain emphasized that disbursals violated RBI and National Housing Bank guidelines, which prohibit loan payouts not linked to construction milestones.

Jain also exposed how banks allegedly extended bilateral loans to Supertech outside the legal scope of the subvention scheme. These include Corporation Bank, IDBI Bank, and Punjab & Sind Bank.

The amicus curiae’s second report criticized the Real Estate Regulatory Authority (RERA) for failing to protect consumer interests. It also called for stronger enforcement of builder compliance and greater transparency from financial regulators.

Calling the report “an eye-opener,” the bench directed Additional Solicitor General Aishwarya Bhati