Supreme Court seeks CBI probe into nexus between banks and builders

New Delhi: The Supreme Court on Tuesday voiced its serious concern in connection with the alleged nexus between banks and builders and sought to know from CBI as to how to go about the investigation to address the grievances of homebuyers in the Delhi-National Capital Region

A bench of Justices Surya Kant and N Kotiswar Singh called for a proposal from the CBI on how the central agency would carry out the investigation and also appointed an amicus curiae for assistance in proceeding with the issues.

The bench said the proposal should be placed before it within two weeks. 

The court was hearing a plea of homebuyers, who claimed that they are being forced by banks to pay EMIs although they have not obtained possession of flats due to delays by builders and developers.

"We are not going to certify any institution as bad or good," the bench said, observing that a CBI probe is required in the grievances raised by the petitioners. 

"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 court said it may not certify a single bank free from doubt.

The court asked Additional Solicitor General Aishwarya Bhati to discuss with CBI officers and put up a proposal as to how they would like to proceed with the investigation into the issues.

The bench noted that Bhati has assured that such a proposal shall be put up before the court within two weeks.

The bench said it is also of the view that an amicus curiae needs to be appointed, especially one who has expertise and vast investigative and administrative experience besides legal intricacies.

Senior advocate Abhishek Manu Singhvi, who was representing one of the financers, contended that if a particular builder goes insolvent, it's not my fault. 

"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," the bench said.

Singhvi suggested that the banks can refrain from charging interest till possession is given. However, the bench said the court is not keen on it.

"It is not going to address the larger issue. It is not going to heal the ailment the entire system is suffering from," the bench said.