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In a recent incident, the Supreme Court has criticized real estate companies and banks. There is one major reason behind this criticism: they are causing problems for homebuyers. Many of us, as homebuyers, have seen that we are suffering because projects are not completed on time. Despite not receiving the property on time, buyers still have to pay the monthly installments. The Supreme Court has criticized the banks on the same issue, as they force buyers to pay monthly installments (EMIs) for homes they haven’t received yet.
The court has ordered the CBI to look into the connection between these builders and banks. The court has also asked the CBI to give a plan within two weeks on how they will conduct the investigation. The court speculate that this investigation will bring out many real estate companies.
Who Said What?
This case was handled by the bench led by Surya Kant and N Kotiswar Singh. The judges said that the builder-bank nexus has caused a lot of suffering to homebuyers. Ultimately, the Supreme Court had to come to their rescue. The court noted that it deals with many such cases every day, but it’s not the job of the court to handle them all.
“We will definitely have a CBI probe. That is clear. Thousands of people are crying. We can’t wipe their tears, but we can address their issues. Something very effective has to be done in a time-bound manner,” the bench said. The judges have made it clear that the CBI probe is necessary to address these issues timely and effectively.
The court has also appointed the 1980-batch IPS officer, Intelligence Bureau chief Rajiv Jain, to assist with this case. This case will involve a huge probe against builders and banks, bringing virtually the entire real estate sector under scrutiny.
Supreme Court’s Encounters With Real Estate Fallouts
The Supreme Court has previously made many judgments on cases related to real estate. The court was also hearing several petitions filed by homebuyers. These homebuyers bought flats, made payments, but never received their property. The homebuyers booked flats under subvention plans in various housing projects in NCR. The allegation was that they were being forced by banks to pay EMIs despite not getting possession of their flats. Under the subvention scheme, banks disburse the sanctioned amount directly to the accounts of builders, who pay EMIs on the amount until flats are handed over to homebuyers. As builders started defaulting on paying EMIs as per the tripartite agreement, banks initiated action against homebuyers to recover the payments.
Senior advocates Abhishek Manu Singhvi and Ranjit Kumar, who were defending the financial institutions, asked the Supreme Court for a favor. They requested the court not to group all the banks together, as their clients had already provided all the information before the bench as sought by it.
Singhvi also said that, if a particular builder became insolvent, then the fault did not lie with banks. On which bench questioned how a bank could release money to a builder despite knowing that not a brick was laid at the site.
The court made it clear that “no one will be spared, but those who acted fairly should not be afraid of the impending investigation”
Here Are The Pointers By The Supreme Court
