Delhi-NCR probe:CBI lodges 22 FIRs in builder-bank nexus probe
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Delhi-NCR probe: CBI lodges 22 FIRs in builder-bank nexus probe
CBI has lodged 22 first information reports (FIRs) to investigate a possible ‘unholy’ nexus between builders and banks. The development comes following an April directive of the Supreme Court. CBI carried out raids at 47 locations in the national capital region (NCR) The cases name over a dozen developers, including Supertech Limited, Logix City Developers Pvt. Ltd, Jaypee Infratech Ltd. and Jaypee Sports International Limited, according to the FIRs registered on July 28, seen by HT. Among banking and other financial institutions, unknown officials of State Bank of India, Indiabulls Housing Finance Ltd, Piramal Finance, HDFC Bank, ICICI Bank, Tata Capital Housing Finance and PNB Housing finance Ltd among others were named in different FIRs. The Supreme Court had issued the order on a bunch of over 170 petitions filed by homebuyers who alleged that huge loans were disbursed by banks to the builders under a scheme even before construction of the underlying projects was complete.
The cases name over a dozen developers, including Supertech Limited, Logix City Developers Pvt. Ltd, Jaypee Infratech Ltd, Jaypee Sports International Limited, according to the FIRs registered on July 28, seen by HT.
The development comes following an April directive of the Supreme Court. The apex court had issued the order on a bunch of over 170 petitions filed by homebuyers who alleged that huge loans were disbursed by banks to the builders under a scheme even before construction of the underlying projects was complete. After builders/developers defaulted on getting the flats constructed, the banks demanded equated monthly instalments (EMIs) for recovering the loan amounts from the homebuyers.
“In a major crackdown on builders involved in cheating and defrauding thousands of homebuyers in NCR and to investigate the nexus of builders and officials of financial institutions, CBI has registered 22 cases against different builders of NCR and unknown officials of various financial institutions in compliance of the directions of the Supreme Court (SC) and conducted searches at 47 premises across NCR,” a CBI spokesperson said in a statement.
“The Supreme Court, observing the unholy nexus between the builders and the financial institutions in cheating the homebuyers by innovating and introducing ‘subvention scheme’ of home loans, directed CBI to register 7 Preliminary Enquiries (PEs),” the spokesperson said, adding that the agency completed inquiry in six PEs within three months and “submitted the status report before the Supreme Court”.
“Upon perusal of the status report submitted by the CBI, the SC directed CBI to register 22 regular cases, against different builders in the NCR area and unknown officials of financial institutions,” the agency said.
Subvention schemes involve a tripartite agreement between the buyer, the bank, and the developer. Under these, buyers typically pay between 5% and 20% up-front, while the bank loans the rest to the developer in instalments. The developer pays the interest on a loan for a certain fixed period, usually two to four years, until the buyer takes possession. The buyer starts paying back the loan in EMIs after this.
The builders and their projects named in the CBI FIRs include Supertech Limited, AVJ Developers (India) Pvt Ltd, Earthcon Universal Infratech Pvt. Ltd, Rudra Buildwell Projects Pvt. Ltd, Geotech Promoters Pvt. Ltd, Shubhkamna Buildtech Pvt. Ltd, Bulland Buildtech Pvt. Ltd, Decent Buildwell Pvt. Ltd, Rudra Buildwell Construction Pvt. Ltd, Saha Infratech Pvt. Ltd, Dream Procon Pvt. Ltd, Logix City Developers Pvt. Ltd, Shubhkamna Buildtech Pvt. Ltd, Jaypee Infratech Ltd, Sequel Buildcon Pvt. Ltd, Ajnara India Ltd, Vatika Limited, CHD Developers Limited, Ninex Developers Limited, Jaypee Sports International Limited, Idea Builders Private Limited and Manju J Homes India Limited, the agency said.
Officials familiar with the development said that directors or promoters of several realty firms have also been named in the FIRs.
Among banking and other financial institutions, unknown officials of State Bank of India, Indiabulls Housing Finance Ltd, Piramal Finance, HDFC Bank, ICICI Bank, Tata Capital Housing Finance and PNB Housing Finance Ltd among others were named in different FIRs.
A status report by CBI earlier this year said that among the 1,200 homebuyers/borrowers represented before the Supreme Court, the majority pertain to Supertech, which is currently facing insolvency proceedings.
Looking at the vast expanse of the case concerning nearly 40 builders, several banks and housing finance companies and the role of regulatory and land-owning authorities, the court on March 18 appointed senior advocate and former Intelligence Bureau Director Rajiv Jain as amicus curiae.
Jain in his exhaustive report informed the court on Tuesday that Supertech received a lion’s share of the loans under the subvention scheme.
According to the report, Supertech got loans of over ₹5,157 crore since 1998. He further pointed out that of the 19 banks and housing finance companies, eight figure in most of the projects, and these include some major names such as India Bulls Housing Finance Limited, Punjab National Bank and PNB Housing, Dewan Housing Finance Corporation Limited (DHFL), and India Infoline Finance Limited.