SC to hear plea seeking equal liability for builders and banks in stalled projects

The Supreme Court agreed to hear a plea seeking a scheme to ensure equal financial loss for builders and lenders if flats under subvention plans are not delivered. The petition also seeks debt relief for homebuyers stuck in stalled projects

New Delhi: The Supreme Court on Monday agreed to hear a plea seeking direction to the Centre to formulate a scheme providing that if flats under the subvention plan are not delivered to homebuyers, both the lender and the builder should suffer equal loss of the disbursed loan amount.

Under the subvention scheme, banks disburse the sanctioned amount directly to the accounts of builders, who are then required to pay the EMIs on the sanctioned loan amount until flats are handed over to the homebuyers.

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After builders start defaulting on the EMIs to banks in line with the tripartite agreement, the banks demand the EMIs from the homebuyers. A bench of Chief Justice Surya Kant and Justice V Mohana issued notices to the Centre and others seeking their responses on the petition, which also sought a direction to frame a structured debt-relief scheme for the homebuyers of stalled housing projects, ensuring stage-linked disbursal compliance.

The apex court was hearing a plea filed by a homebuyer who alleged that he did not get possession of the flat booked by him and was forced to pay the EMIs. The counsel appearing for the petitioner claimed that financial institutions were not following the subvention scheme.

While issuing notice on the petition, the bench said no coercive action should be taken against the petitioner in the meantime.

The plea has sought a direction to the Centre to “formulate a scheme providing that in case the asset/ flat under the subvention plan is not made available” to the homebuyers, both the lender and builder should suffer equal loss of the entire disbursed loan amount.

While hearing a batch of separate petitions, the top court had in July last year allowed the Central Bureau of Investigation (CBI) to register 22 cases over the “unholy nexus” between the banks and developers to dupe homebuyers in the National Capital Region (NCR).