For years, thousands of homebuyers across India’s National Capital Region (NCR) have found themselves caught in a legal and financial limbo: servicing home loans for apartments that remain incomplete or undelivered. On Tuesday, the Supreme Court sought to move one critical strand of this crisis forward.
A bench led by Chief Justice of India Surya Kant directed the Metropolitan Magistrate at Delhi’s Rouse Avenue Courts to proceed with criminal trials based on charge sheets filed by the Central Bureau of Investigation. The cases stem from allegations of a deep-rooted nexus between real estate developers and banks, accused of exploiting homebuyers through controversial loan subvention schemes.
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The court’s direction marks a significant step toward adjudicating criminal liability in what judges have previously described as a systemic failure affecting thousands of families.
How Subvention Schemes Trapped Homebuyers
At the heart of the controversy are loan subvention schemes, once aggressively marketed across NCR’s booming real estate market. Under these arrangements, banks disbursed large housing loans directly to builders, with assurances that the developers would service the equated monthly instalments (EMIs) during the construction phase.
When projects stalled or builders defaulted, banks shifted the repayment burden onto homebuyers—despite the fact that possession of flats had not been handed over. Many buyers told the court they were pursued for EMIs, threatened with coercive recovery action, and even faced cheque-bounce complaints, all while construction sites lay dormant.
The Supreme Court had first intervened in September last year, ordering the CBI to register criminal cases after preliminary inquiries suggested the commission of cognisable offences involving both private developers and financial institutions.
Judicial Oversight and the Role of the Amicus
During Tuesday’s hearing, the court took note of a detailed report submitted by court-appointed amicus curiae, advocate Rajiv Jain, which examined the conduct of seven banks and financial institutions. The report, according to the bench, documented patterns of unfair treatment and structural disadvantage faced by homebuyers.
The court directed that a soft copy of the report be shared with the CBI to assist in ongoing investigations. It also ordered the agency to furnish complete case records to the amicus once investigations conclude, enabling independent assessment of the fairness and thoroughness of the probe.
In a further bid to streamline proceedings, the court instructed homebuyers involved in the litigation to submit complete details of their loans and payments within a week, warning that non-compliance could result in dismissal of their petitions for non-prosecution.
Balancing Accountability and Protection
The bench reaffirmed its earlier stance that homebuyers should not be subjected to coercive recovery actions while criminal proceedings are underway. An interim protection granted in July 2024 remains in force, shielding buyers from actions such as cheque-bounce prosecutions under the Negotiable Instruments Act initiated by banks or builders.
Legal observers say the court’s insistence on pushing the CBI charge sheets to trial reflects growing judicial impatience with delays in complex economic offences. It also underscores an attempt to balance two imperatives: holding powerful institutions accountable while protecting ordinary citizens from cascading financial harm.
As the cases move into the trial phase, the spotlight will now shift to lower courts—and to whether criminal law can finally address one of the most contentious chapters in NCR’s real estate boom.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
