CBI Investigates 24 Projects in SC-Ordered Subvention Probe

• The CBI has launched an extensive probe into 24 real estate projects across Noida, Greater Noida, and the Yamuna Expressway over alleged financial frauds under subvention schemes, following a Supreme Court directive issued on April 29.
• The investigation is focused on a possible nexus between developers and banks, and violations of RBI and NHB guidelines, with buyers left paying EMIs for undelivered homes due to developers’ defaults in pre-EMI payments.
• The Supreme Court has ordered full cooperation from local authorities and regulatory bodies, with seven preliminary reports sought including one on Supertech projects and another set of reports for cities like Mumbai, Bengaluru, Gurgaon, and Mohali.

The Central Bureau of Investigation (CBI) has initiated a broad inquiry into 24 realty projects in Noida, Greater Noida, and Yamuna Expressway, including alleged financial fraud in subvention schemes that could have cheated thousands of homebuyers. This probe, ordered in April 29 after a Supreme Court directive, is probing for any nexus between realty developers and banks, and also investigating if the loan disbursals under the subvention scheme had gone against guidelines set by the Reserve Bank of India (RBI) and the National Housing Bank (NHB).

As part of the investigation, the CBI has sought minute-by-minute records from the Noida, Greater Noida, and Yamuna Expressway authorities of development. These include layout plans, sanction letters, dues statements, registry details, and developer information of the identified projects. Officers confirmed that the Noida Authority has been requested to furnish documentation for nine projects, including Supertech's Cape Town in Sector 74, Logix's Blossom Zest in Sector 143, Mahagun Mezzaria in Sector 78, Ajnara Ambrosia in Sector 118, Jaypee Greens Orchard in Sector 131, Shubhkamna Tech Homes in Sector 137, and three projects in Sector 150 by Implex Infrastructure, Sequel Buildcon, and Logix Heights.

The CBI in Greater Noida has asked for details of 11 projects, some common with the list of Noida. The projects include Supertech's Ecovillage 2 and 3, and Czar, besides projects by AVJ Heights, Earthcon Universal, Rudra, Geotech, Morpheus Developers, Future World, and Bulland Group. At the same time, the Yamuna Expressway Authority has been requested to provide documents for four projects, such as Supertech's UP Country in Sector 17A, Oasis Realtech's Grandstand in Sector 22D, and Jaypee Group's Kove and Kassia in Sector 25.

The probe focuses on charges that under the subvention plan, banks had extended loans to developers on behalf of house buyers with the expectation that the developers would pay pre-EMI interest till possession was handed over. But some developers allegedly failed to make these payments, leaving house buyers saddled with EMIs on houses that were never handed over. Investigators are also looking at whether construction-linked disbursals were extended without checking project progress, which could jeopardize buyer interests and break regulatory guidelines.

The Supreme Court has asked all three development authorities to actively cooperate with the probe and designate nodal officers. It has also requested the CBI to submit seven preliminary inquiry reports, including one solely on Supertech projects, and others on the areas of Gurgaon, Ghaziabad, Mumbai, Bengaluru, Kolkata, Mohali, and Allahabad. For proper coordination, the court has directed appointment by the Uttar Pradesh and Haryana governments, and deputy secretary-level nodal officers from the RBI, Real Estate Regulatory Authority (RERA) of the two states, and the Union Ministry of Housing and Urban Affairs.

Moreover, joint development deals that form the foundation of some of the projects are being questioned, with investigators looking into how the deals might have given rise to the financial intricacies and delays. In a separate move, Allahabad High Court has ordered the CBI and Enforcement Directorate (ED) to probe Sports City projects in Noida Sectors 78, 79, and 150 for financial and legal irregularities. Officials from Noida Authority have confirmed that all required project details have already been submitted to the CBI for further action.