The Supreme Court raised concerns over the alleged collusion between banks and builders, ensuring a Central Bureau of Investigation probe into homeowners' grievances. 

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This came after a group of homeowners moved the court, alleging banks were coercing them into paying EMIs despite not receiving possession of flats due to delays by the builders.

“Not a single bank is free from doubt. We have seen their functioning and the kind of hobnobbing that they do. Before knowing whether a single brick has been laid the banks have released payments," remarked the bench, comprising Justices Surya Kant and N Kotiswar Singh.

"We are not going to certify any institution as bad or good," said Kant, according to Indian media reports.

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"We will definitely have CBI probe. That is clear. Thousands of people are crying. We can't wipe their tears but we can address their issues. Something very effective has to be done in a time-bound manner," he added. 

In a groundbreaking judgment passed in July 2024, India's Supreme Court prohibited any coercive measures, including EMI recovery, against homebuyers in the National Capital Region who have yet to receive possession of their flats.

However, the implementation of the landmark ruling remains elusive. 

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The homeowners made another startling allegation stating that the loan amounts were unlawfully disbursed directly into builders' and developers' accounts, contravening Reserve Bank of India (RBI) guidelines.

"If a particular builder goes insolvent, it's not my fault," said Abhishek Manu Singhvi, who was representing the financiers.

To this, Justice Kant said, "Your fault is that, knowing not a brick has been laid at the site, you released 60 per cent! How can this be without quid pro quo!?"

Singhvi proposed that banks could waive interest charges until homeowners receive possession of their properties. However, the court rejected it.

"It is not going to address the larger issue. It is not going to heal the ailment the entire system is suffering from. Lakhs, lakhs of people... the Supreme Court is handling the poor people's plight every day," Justice Kant said.

"We don't want any reluctance. We want to go into the root... we have zero tolerance. We will request the amicus (curiae) to assist," he said. 

(With inputs from agencies)