The Supreme Court has taken cognizance of the plight of homebuyers in the National Capital Region (NCR) who are caught in a financial quagmire due to delayed housing projects under subvention schemes. These buyers are now being harassed by banks for loan EMIs that developers were supposed to pay until project completion.
What is the Subvention Scheme?
Under the subvention scheme, banks directly disbursed home loan amounts to builders, who committed to paying the EMIs until possession of the homes was handed over to buyers. However, with numerous builders defaulting on these payments, banks have turned to homebuyers to recover the dues.
The issue arose when builders, in violation of tripartite agreements, failed to meet their EMI commitments. This left buyers, who had already paid large sums, facing legal action and financial stress.
Supreme Court’s Action
A bench of Justices Surya Kant and Ujjal Bhuyan has sought comprehensive data from homebuyers, builders, and banks on:
- Payments made by buyers and builders to banks.
- NCR housing projects completion status and possession timelines.
- Recovery actions taken against homebuyers.
- Builder compliance with advertised amenities.
- Whether builders are undergoing insolvency proceedings.
- Relief granted by regulatory authorities like RERA.
The court aims to explore solutions to protect homebuyers from coercive bank actions while addressing the core issue of builder defaults.
Relief Granted to Homebuyers
Previously, the court directed that no coercive actions, such as EMI recovery or cheque bounce complaints, be taken against homebuyers. These directions provide temporary relief to hundreds of affected buyers who approached the apex court after failing to secure redressal in the Delhi High Court in 2023.
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Illegal Loan Disbursal Practices Highlighted
Buyers, represented by advocate Anshul Gupta, argued that banks violated RBI and National Housing Bank guidelines by disbursing loans directly to builders without linking payments to construction milestones. This malpractice has left buyers stranded, as they neither received possession of their homes nor benefitted from their financial commitments.
A Call for Resolution
The case highlights the urgent need for stricter regulation of subvention schemes and accountability for builders and financial institutions. As the Supreme Court scrutinizes the issue, thousands of homebuyers await justice and the realization of their dream homes.
