Builders under scrutiny: Supreme Court puts brakes on coercive action against NCR homebuyers
homebuyers across the National Capital Region (NCR), ruled that no coercive action can be taken against those who have booked flats under subvention schemes but are yet to receive possession due to delays by developers. This ruling applies to actions by both banks and builders concerning EMI payments, and cheque bounce cases.
Under a subvention scheme, banks disburse loan amounts directly to builders, who are responsible for paying the EMIs until the buyers take possession of their flats. However, many builders have defaulted on these payments, prompting banks to seek repayment from the buyers. This situation has led to homebuyers approaching the Delhi High Court, which did not grant them relief, which led them to appeal to India's apex court.
A two-judge bench of the Supreme Court heard the case, ordering an interim stay on all coercive actions, including complaints under Section 138 of the Negotiable Instruments Act, 1881.
«No coercive action including complaint under Section 138 of the Negotiable Instruments Act, 1881, shall be entertained on behalf of the banks/financial institutions or builders/developers against the homebuyers,» the bench of Justices Surya Kant and Ujjal Bhuyan said.
Homebuyers argued that they were victims of illegal loan disbursements made by banks directly to builders, bypassing the construction-linked disbursement norms set by the Reserve Bank of India (RBI).
«This is the classic case where one rich man (bank/financial institutions) gave money to another rich man (builder). The rich
