In a significant development for India’s real estate sector, the Supreme Court has directed several leading financial institutions to grant sanction for the prosecution of their officials allegedly involved in an unlawful nexus with real estate developers. The order forms part of the court’s ongoing efforts to address delays in housing projects that have affected thousands of homebuyers.
A bench headed by Chief Justice of India Surya Kant instructed State Bank of India (SBI), UCO Bank, HDFC Bank, ICICI Bank and Sammaan Capital to provide the necessary approvals within two weeks for prosecuting officers who have been prima facie found to be involved in the alleged misconduct. The court warned that failure to comply would require the concerned banks to explain the delay.
The Central Bureau of Investigation (CBI) is investigating allegations of collusion between banks, financial institutions and real estate developers in projects where homebuyers paid substantial amounts, but construction either never commenced or remained incomplete. Among the developers under scrutiny is Supertech Ltd., while the investigation also covers projects across the National Capital Region and other major cities.
To accelerate the investigation, the Supreme Court directed the Director Generals of Police of Uttar Pradesh, Tamil Nadu, Maharashtra, Punjab and Karnataka to provide additional police personnel to the CBI on deputation. The states have been asked to nominate officers within ten days, with the court cautioning that any delay would be viewed seriously.
The court further instructed the CBI to share relevant case details with the Enforcement Directorate (ED), enabling the agency to examine possible proceeds of crime associated with the real estate projects under investigation. This could lead to parallel financial investigations under applicable laws.
In addition, the CBI has been directed to investigate allegations involving Ozone Group in Karnataka, Rudra Buildwell Projects and Omaxe Group in Uttar Pradesh. The agency will also examine whether certain banks knowingly executed mortgage agreements despite the absence of legitimate lessees for the leased land, a matter that could have significant implications for lending practices in the real estate sector.
The Supreme Court has sought a status report from the CBI on its investigation into the role of banks and financial institutions. The proceedings are expected to influence accountability in real estate financing and strengthen oversight of housing projects, particularly those that have left homebuyers waiting for possession of their homes.
Image- sci.gov.in
