The Supreme Court has directed the CBI to register FIRs after its seventh preliminary enquiry found cognizable offences in the alleged builder–bank nexus for projects outside Delhi-NCR in Himanshu Singh and Ors. v. Union of India and Ors., SLP(C) No. 7649/2023. A Bench of Justices Surya Kant, Ujjal Bhuyan, and N Kotiswar Singh recorded Additional Solicitor General Aishwarya Bhati’s submission and permitted registration of six regular cases based on the completed enquiry for projects beyond NCR.
Introduction
In Himanshu Singh and Ors. v. Union of India and Ors., the Supreme Court noted that the CBI’s seventh preliminary enquiry into the alleged builder–bank nexus had concluded with a finding that cognizable offences were disclosed, leading the Court to authorize FIR registration and investigation for projects outside NCR. The matter arises from petitions by over 1,200 homebuyers alleging collusion between developers and lenders under subvention schemes, where loans were released upfront to builders and EMIs later demanded from buyers despite non-possession, prompting Court-monitored enquiries and directions to proceed beyond the enquiry stage. Earlier, the Court had allowed conversion of six preliminary enquiries into 22 regular cases concerning NCR projects and gave time to complete the seventh enquiry for non-NCR locations, which has now culminated in permission to register six cases.
Legislation Involved
The Court’s direction aligns with the Code of Criminal Procedure framework that mandates registration of an FIR when information discloses a cognizable offence under Section 154 CrPC. The investigation is to be carried out by the CBI in accordance with its statutory powers derived from the Delhi Special Police Establishment Act, 1946, with Supreme Court directions enabling investigation across jurisdictions notwithstanding state consent under Section 6 of the DSPE Act.
Provision
- Under Section 154 CrPC, registration of an FIR is mandatory when the information discloses commission of a cognizable offence, and this principle has been affirmed by the Supreme Court in Lalita Kumari.
- A preliminary enquiry is permissible only where the information does not prima facie disclose a cognizable offence, and once such an offence is indicated, FIR must be registered without delay, reflecting the limited scope of preliminary enquiry in law.
- The CBI derives investigative powers from the DSPE Act, 1946, and while state consent is generally required under Section 6, the Supreme Court can direct the CBI to investigate anywhere in India, as reiterated in authoritative guidance on DSPE practice.
- In this case, the Court directed that after the 7th PE found cognizable offences, the CBI shall register cases under appropriate provisions of law, proceed with search and seizure, and share the criminal inquiry report with the amicus after those operations, with the next hearing slated in October.
Analysis
The order marks a calibrated shift from preliminary fact-finding to full criminal investigation in a multi-city probe of subvention-scheme linked housing projects, expanding the Court’s earlier NCR-focused directions to projects in cities such as Mumbai, Bengaluru, Kolkata, Mohali, and Prayagraj. By insisting on FIRs where cognizable offences are found, the Bench has ensured the transition from enquiry to investigation, reinforcing procedural rigor and offering a pathway for searches, seizures, and accountability through regular cases beyond NCR as previously done within NCR through 22 cases allowed in July. The Court has maintained institutional oversight by requiring the CBI to furnish the inquiry report to amicus curiae Rajiv Jain after search and seizure, ensuring expert assistance continues to inform the Court’s supervision of a complex, system-wide finance–real estate conduct matrix affecting thousands of homebuyers.
It was ordered: ‘Ld. ASG, on instructions, informs that the preliminary enquiry by the CBI, in terms of the directions issued earlier, is complete and as per such enquiry, a cognizable offence is made out. That being so, the CBI will register the case under appropriate provisions of law and proceed to investigate the same. After completion of search and seizure, a copy of the criminal inquiry report be handed over to ld. Amicus to enable him to assist the Court’.
The Court’s approach is consistent with Lalita Kumari, which held that FIR registration is mandatory under Section 154 CrPC when information discloses a cognizable offence, with only narrow exceptions permitting a preliminary enquiry when the offence is not apparent on the face of the information. As the seventh preliminary enquiry has now concluded with a finding that cognizable offences are made out, the move to FIRs faithfully tracks this precedent by converting preliminary verification into formal investigation as required by law.
Conclusion
With the seventh preliminary enquiry complete and cognizable offences indicated, the Supreme Court has directed the CBI to register FIRs and commence full investigations into alleged builder–bank nexus cases outside NCR, extending the Court’s earlier NCR-focused criminal scrutiny to a broader set of projects and jurisdictions. The order aligns with the statutory scheme of Section 154 CrPC and the DSPE Act, and preserves Court oversight through amicus assistance as the CBI proceeds with searches, seizures, and case development in six newly permitted regular cases.
