The Central Bureau of Investigation (CBI) has filed a chargesheet against a Delhi-based real estate company, its subsidiaries, company directors and officials of three public and private sector banks as well as proxy homebuyers as part of its ongoing probe into the construction bank nexus, the agency said on Wednesday.
The CBI is investigating at least 50 cases across the country against several construction companies, bankers and other financial institutions. The agency, registered on the directions of the Supreme Court, is looking into the alleged “unholy” nexus between construction companies and financial institutions in sanctioning huge sums under so-called subsidy schemes without due diligence. In April 2025, the Supreme Court ordered a CBI probe after a batch of over 170 petitions filed by over 1,200 homebuyers alleged that banks disbursed huge loans to construction companies under the scheme even before the projects began. After builders/developers defaulted, banks demanded equal monthly installments to recover loan amounts from homebuyers.
Support plans include a tripartite agreement between the buyer, the bank and the developer. Under these loans, buyers typically pay between 5% and 20% upfront, while the bank lends the rest to the developer in instalments.
The developer pays interest on the loan for a specified period, usually two to four years, until the buyer takes possession of the loan. The buyer then starts repaying the loan in equal monthly installments. Based on the CBI’s FIRs, the department is also conducting a parallel money laundering investigation into the matter.
The agency said in a statement on Wednesday, “In a major breakthrough in a case involving widespread cheating of homebuyers and criminal misconduct by public servants, the Central Bureau of Investigation (CBI) has filed a chargesheet against AVJ Developers (India) Pvt. Ltd., M/s AVJ Developers Pvt. Ltd…. and their directors and bank employees… and proxy homebuyers for their alleged involvement in a criminal conspiracy causing wrongful loss to financial institutions and innocent homebuyers.”
AVJ is currently undergoing a corporate insolvency resolution process. An email query sent to AVJ’s CIRP solution specialist remained unanswered.
“The investigation conducted by the CBI revealed that the accused construction company and its directors, in conspiracy with public servants and other private persons, allegedly induced homebuyers/investors through false assurances and fraudulent declarations and obtained financial benefits by resorting to illegal and deceptive means. It was also revealed during the investigation that the accused public servants misused their official positions to facilitate illegal acts carried out by the builder in violation of established standards and procedures, thereby extending an undue financial advantage to the construction company,” she added. and causing corresponding wrongful loss to the relevant financial institutions and homebuyers.
