The Supreme Court slams banks and builders over stalled housing projects, orders CBI to investigate alleged loan fraud and unfair EMI charges.
March 18, 2025: The Supreme Court of India has taken a strong stance against banks and builders, ordering a Central Bureau of Investigation (CBI) probe into allegations of loan fraud and unfair EMI charges imposed on homebuyers. Justice Surya Kant, leading the two-judge bench, assured that a thorough investigation would be conducted to address the grievances of homeowners who have been forced to pay EMIs without receiving possession of their flats due to delays by builders and developers.
"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," Justice Kant stated.
SC Slams Banks for Loan Mismanagement
Homebuyers have accused banks of colluding with developers by disbursing loan amounts directly to builders in violation of RBI guidelines. The court also noted that banks failed to verify project progress before releasing funds, leaving buyers financially burdened while construction remains stalled.
Justice Kant rebuked banks for their reckless lending, saying:
"Your fault is that, knowing not a brick has been laid at the site, you released 60 per cent! How can this be without quid pro quo!?"
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When senior advocate Abhishek Manu Singhvi, representing financial institutions, suggested that interest charges be paused until possession is given, the court rejected the proposal, calling for a systemic overhaul instead of temporary relief.
Supreme Court’s Previous Ruling Ignored
In July 2024, the Supreme Court had ruled that no coercive action (including EMI recovery) should be taken against homebuyers in the National Capital Region (NCR) who have not received possession. However, banks have allegedly continued to harass buyers, disregarding the order.
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Justice Kant remarked:
"We may not certify a single bank free from doubt... we have seen their functioning. The Supreme Court is handling the poor people's plight every day."
What Happens Next?
- The CBI has been directed to submit a plan on how it will conduct the investigation.
- The Supreme Court has appointed an amicus curiae (legal expert) to assist in handling the large volume of complaints.
- The next hearing is scheduled in two weeks.
With this landmark intervention, the Supreme Court aims to bring justice to thousands of homebuyers and ensure accountability among financial institutions and developers.
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#SupremeCourt, #CBIProbe, #HomebuyersRights, #RealEstateFraud, #BankScam, #EMIRelief, #HousingCrisis, #LegalNews, #NCRHousing, #JusticeForHomebuyers
Last Updated on March 18, 2025 by Misha Bhatia
