Banks should not take any action… ‘Supreme’ relief to homebuyers waiting for possession in Delhi-NCR

New Delhi : Giving a big relief to home buyers in NCR, the Supreme Court has forbidden the builders from taking any strict action for EMI. This relief is for those buyers who had booked flats under the subsidy plan. However, due to the delay of the builders, they have not yet got possession of their flats. The Supreme Court has said that in such cases, the bank or the builder cannot take any strict action against them regarding the payment of EMI. No complaint will be filed against them in the case of check bounce.

what is the whole matter

Under the subvention scheme, the banks transfer the sanctioned amount directly into the accounts of the builders, who have to pay EMIs on the sanctioned loan amount till the possession of the flat is handed over to the home buyers. But when the builders started defaulting on paying EMIs to the banks as per the tripartite agreement, the banks started taking action against the buyers to recover the amount. Troubled by this action of the banks, a large number of home buyers had approached the Delhi High Court. But in 2023, the High Court refused to grant them relief, saying that they had alternative remedies available. After this, they approached the apex court, where they got interim protection.

what did the supreme court say

As home buyers are at risk of cheque bounce cases, a bench of Justice Surya Kant and Justice Ujjwal Bhuyan gave an important direction. The court said that no cheque bounce complaint should be filed against such home buyers while the matter is pending. The order said that in the meantime, there will be an interim stay in all cases, the effect of which will be that no coercive action, including complaints under Section 138 of the Negotiable Instruments Act, 1881, will be taken against home buyers by banks/financial institutions or builders/developers. This order provides safety to all such home buyers.

What the petitioners said

Challenging the high court order, the aggrieved home buyers said they were victims of illegal disbursement of loan by the bank directly into the builder’s account in violation of RBI guidelines. The petition filed by advocate Anshul Gupta on behalf of a group of home buyers said that this is a case where a rich man (bank/financial institution) gave money to another rich man (builder). The rich man who received the money (builder) ran away without fulfilling his/her obligation. The rich man who gave the money (bank/financial institution) disbursed it in violation of the law of the land. The poor man (home buyer) has now become a victim and has been pushed into litigation by the bank, while he/she has not received a single rupee. And he/she is also deprived of his/her dream home.

‘Banks are harassing us’

Advocate Anshul Gupta alleged that there was gross violation of National Housing Bank (NHB) guidelines including RBI circulars. Banks disbursed the loan amount directly to the builder without linking it to the phase of construction. he/she said that now home buyers are forced to suffer because the builder, who had promised to pay the amount to the bank, failed to do so and ran away with the money leaving the home buyer in trouble and the banks are harassing him/her.

Supreme Court sought response from builders

The petition said that the High Court failed to take note of the fact that both the builder and the bank acted in collusion. The poor home buyer acts as a conduit for getting the loan sanctioned and transfer of money from the bank to the builder. Here the home buyer is pushed into litigation for an amount which he/she himself never saw or actually received. The actions of both the builder and the bank violate the tripartite agreement. They are also in violation of the statutory guidelines of RBI/NHB. While agreeing to examine the grievances of the home buyers, the Supreme Court gave two weeks’ time to the builders/developers to file a counter affidavit containing details of their properties. The court made it clear that if they fail to comply with its order, it will be compelled to take strict action against them.