Supreme Court pulls up CBI over ‘eyewash’ probe in homebuyer fraud cases

New Delhi: The Supreme Court on Wednesday questioned the pace and manner of the Central Bureau of Investigation’s (CBI) probe into alleged collusion between builders and financial institutions in cheating homebuyers, warning the agency against conducting what it described as an “eyewash” investigation, TOI reported.

A bench headed by Chief Justice Surya Kant, along with Justices Joymalya Bagchi and Vipul M Pancholi, said filing a chargesheet without custodial interrogation of officials from financial institutions and builders raised serious concerns about the quality of the investigation.

Also Read: In a first, Supreme Court allows passive euthanasia


“How can you file a chargesheet without holding a custodial interrogation? This will lead to eyewash,” the bench observed while hearing the matter.

The court said builders accused of siphoning off homebuyers’ money should be arrested so investigators can determine where the funds were diverted and ensure recovery and refund to affected buyers. The bench also expressed displeasure over the slow progress in the investigation being conducted by the CBI.

During the hearing, Additional Solicitor General Aishwarya Bhati, appearing for the Centre, suggested that some cases could be investigated by state police. However, the Supreme Court rejected the proposal, stating that allowing parallel probes would create confusion.

“If the state police had been competent, the investigation would not have been handed over to the CBI,” the bench said, while disapproving of the agency’s stance on the issue. The court added that the CBI could seek personnel and logistical support from state police through their Directors General of Police if required.

Also Read: NCERT to review textbooks across classes; expert panel to vet curriculum, Centre tells Supreme Court

The court directed the agency to provide a timeline for completing the investigation, noting that the probe could not continue indefinitely. It asked a competent CBI officer to file an affidavit specifying the timeframe.

The bench also noted that any delay would prolong the hardship faced by homebuyers who have allegedly been defrauded by builders “in collusion and connivance with financial institutions and banks.”

The court clarified that affected parties, including homebuyers, banks and builders, should submit their claims, suggestions and recommendations to the amicus curiae, who would review the submissions and place relevant material before the court.

The Supreme Court had earlier ordered a CBI investigation into the alleged nexus between banks and real estate developers accused of duping homebuyers.

(With inputs from Times of India)