Central Bureau of Investigation has claimed to have uncovered another major builder-bank nexus while investigating large-scale homebuyers fraud cases across the country. The agency has filed its ninth chargesheet in connection with an alleged housing fraud involving M/s Manju J Homes India Ltd., its directors, and officials of State Bank of India in relation to a housing project located in Ghaziabad, Uttar Pradesh. According to the CBI, the case involves allegations of cheating homebuyers, diversion of funds, and abuse of banking procedures.
Alleged criminal conspiracy and misrepresentations
The investigating agency stated that its probe revealed that the builder company and its directors allegedly entered into a criminal conspiracy with bank officials and other private individuals to mislead investors and homebuyers through false assurances and fraudulent representations. Investigators alleged that buyers were persuaded to invest in the housing project on promises of timely possession, secure investment returns, and completion assurances, while financial irregularities and deceptive practices were allegedly carried out behind the scenes.
According to the CBI, the accused bank officials abused their official positions by allegedly violating established banking norms and procedures in order to facilitate the illegal activities of the builder company. Investigators claimed that procedural safeguards were ignored to provide undue financial advantages to the builder, resulting in corresponding losses to financial institutions as well as innocent homebuyers.
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Diversion of funds and impact on buyers
The agency stated that the investigation uncovered substantial documentary and oral evidence suggesting a wider conspiracy involving misuse of official authority, diversion and misutilisation of project funds, and fraudulent conduct toward homebuyers. According to investigators, funds collected from buyers for the housing project were allegedly diverted or improperly used, resulting in delays in construction and failure to deliver flats to many purchasers within promised timelines.
The CBI has filed the chargesheet before the competent court under various sections of the Indian Penal Code relating to criminal conspiracy, cheating, criminal breach of trust, forgery for the purpose of cheating, and using forged documents as genuine. Public servants named in the case have also been charged under provisions of the Prevention of Corruption Act for alleged criminal misconduct.
Context: part of nationwide action
Officials said the case forms part of a broader nationwide investigation initiated following directions issued by the Supreme Court in matters concerning alleged homebuyers fraud and diversion of funds by builders. The CBI is currently investigating nearly 50 cases involving builders and unidentified officials of financial institutions across India. These cases involve allegations that money collected from homebuyers was diverted for purposes unrelated to the completion of residential projects.
The agency also noted that it had previously filed chargesheets in several similar cases involving prominent real estate companies and their directors. These include Rudra Buildwell Construction Pvt. Ltd., Dream Procon Pvt. Ltd., Jaypee Infratech Ltd., AVJ Developers (India) Pvt. Ltd., CHD Developers Pvt. Ltd., Shubhkamna Buildtech Pvt. Ltd., Sequel Buildcon Pvt. Ltd., and Logix City Developers Pvt. Ltd. In many of those cases, officials of banks and financial institutions were also accused of facilitating irregularities linked to housing finance and project funding.
Real estate and banking sector experts say builder-bank nexus cases have severely impacted lakhs of homebuyers over the past several years. In numerous housing projects, buyers allegedly continued paying instalments and EMIs despite construction remaining incomplete for extended periods, while developers continued receiving financial support from banks and lenders.
Experts further note that middle-class families are often the worst affected in such cases because they face the combined burden of paying housing loan EMIs and rental expenses simultaneously after project delays. The CBI said it remains committed to ensuring accountability in cases involving economic offences, corruption, and public fraud, particularly matters that adversely affect ordinary citizens and homebuyers across the country.
