Home Loan Subvention Fraud : Supreme Court Issues Directions To Fasten CBI Probe & Prosecution Sanctions Against Bankers

The Supreme Court today directed seven States to provide additional police officers to the Central Bureau of Investigation (CBI) within 10 days for its probe into the alleged builder-bank fraud nexus in housing projects.The Court also directed State Bank of India, UCO Bank, HDFC, ICICI and Sammaan Capital, among other financial institutions, to expeditiously process the CBI's requests for sanction under Section 19 of the Prevention of Corruption Act, 1988 to prosecute their officers and officials who have been prima facie found involved during the investigation.A bench of CJI Surya Kant, Justice Joymalya Bagchi and Justice V Mohana passed the directions while dealing with petitions concerning alleged systemic failures by banks, housing finance companies and government authorities in housing loan subvention schemes.The Court noted that the CBI has so far registered 50 FIRs. Of these, investigation has been completed in 18 cases. Charge sheets have been filed in 17 cases, while a closure report has been filed in one case.According to the CBI's fifth supplementary status report, cognisance has been taken in three of the 17 cases in which charge sheets were filed.In five cases, the CBI also investigated the role of officials of financial institutions and charged them under the Prevention of Corruption Act. However, sanction for their prosecution under Section 19 of the Act is awaited from the competent authorities. The Court noted that a total of 34 prosecution sanctions are awaited from different banks.The CBI also informed the Court that it requires additional police officers or officers on deputation from Uttar Pradesh, Rajasthan, Tamil Nadu, Maharashtra, Haryana, Punjab and Karnataka because of the increased investigation workload. It said that despite communications by the CBI Director, neither had the additional personnel been provided nor had the concerned police chiefs responded.The Court accordingly directed the Directors General of Police of Uttar Pradesh, Rajasthan, Tamil Nadu, Maharashtra, Haryana, Punjab and Karnataka to consider the CBI's requests and provide suitable additional police officers.The requisite officers have to be nominated or deputed as early as possible and not later than 10 days.“The Director General of Police of State of Uttar Pradesh, Haryana, Rajasthan, Tamil Nadu, Maharashtra, Punjab, and Karnataka will consider and provide additional suitable police officers, as per the request of CBI. The requisite suitable officers shall be nominated/deputed as early as possible, but not later than 10 days. In the event of any delay or failure, this court will be constrained to take a serious view,” the Court said.The Court also directed the competent authorities of the concerned banks and financial institutions, including State Bank of India, UCO Bank, HDFC, ICICI and Sammaan Capital, to expeditiously process and accord the necessary sanction under Section 19 of the Prevention of Corruption Act for prosecution of their officers and officials who have been prima facie found involved by the CBI.The exercise has to be completed within two weeks. In case of failure, the competent authority will have to submit an explanation to the Supreme Court.The Court further directed the CBI to provide information to the Enforcement Directorate regarding cases in which the ED may be required to take cognisance of matters concerning proceeds of crime.It also directed the CBI to scrutinise and take cognisance of representations, documentary evidence and other material forwarded to it by Amicus Curiae Rajiv Jain.The Court further asked the agency to conduct a thorough investigation into the aspects highlighted by the Amicus in his comments on three charge sheets.The CBI was also directed to thoroughly investigate allegations and documents contained in six representations concerning alleged offences by banks, housing authorities and builders. The representations include allegations relating to Ozone Group in Karnataka, Maharashtra and Tamil Nadu, Vivansaa in Bengaluru, Rudra Buildwell Construction Private Limited in Greater Noida and Omaxe Group in Chandigarh.The Court directed the CBI to submit a separate status report regarding its investigation concerning the builders and banking institutions involved in these representations.The CBI was further directed to examine other instances involving tripartite agreements where the lessee and builder were different. It has to examine whether banks or housing finance companies knowingly or otherwise entered into agreements creating mortgages without the lessee, to whom the land had actually been leased, being a party to the agreement.CBI has also to examine whether any wrongful loss was caused to banks or housing finance companies because of the exclusion of such lessees from the agreements.The directions came after the Court considered the CBI's fifth supplementary status report as well as notes dated August 6, 2026 filed by Amicus Curiae Rajiv Jain. The notes by the ...

Home Loan Subvention Fraud : Supreme Court Issues Directions To Fasten CBI Probe & Prosecution Sanctions Against Bankers

Amisha Shrivastava

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Amisha Shrivastava

Home Loan Subvention Fraud : Supreme Court Issues Directions To Fasten CBI Probe & Prosecution Sanctions Against Bankers

Amisha Shrivastava

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

Amisha Shrivastava

This is a premium content
Available exclusively to
Our subscribers