CBI Launches Probe into Chennai's Metrozone Project Over Alleged Fraud
The Metrozone project in Koyambedu, Chennai, has become the latest addition to a growing list of real estate ventures under scrutiny by the Central Bureau of Investigation (CBI). The agency is investigating suspected violations of subvention schemes and allegations of cheating homebuyers through a collusive bank-developer nexus.
Supreme Court Directs CBI Action
Acting on the directions of the Supreme Court, the economic offences wing of the CBI in Delhi has registered a formal case against Ozone Projects Pvt Ltd, the developer behind the Metrozone project. The case also names the company's promoters, directors, and unknown officials from Axis Bank Ltd and Axis Finance Ltd. Charges include fraud and corruption, highlighting the severity of the allegations.
According to the First Information Report (FIR), the directors of Ozone Projects Pvt Ltd, which is currently undergoing the Corporate Insolvency Resolution Process (CIRP), allegedly conspired with banks and financial institutions. This conspiracy involved availing entire home loans in the names of prospective homebuyers, in direct violation of regulations set by the Reserve Bank of India and the National Housing Bank.
Violation of Subvention Schemes
The FIR details that the developer defaulted on pre-Equated Monthly Installments (pre-EMIs), breaching the terms of tripartite agreements under subvention schemes. In such schemes, the developer is obligated to pay the EMIs until possession of the property is handed over to the buyer. However, Ozone Projects Pvt Ltd allegedly failed to fulfill this commitment, plunging homebuyers into financial turmoil.
Ozone Projects Pvt Ltd launched the Metrozone project in 2015, promising world-class amenities and infrastructure with a time-bound completion schedule. Flats were allotted from 2021 onwards, with possession promised for 2024. The failure to meet these commitments led to widespread distress among buyers.
Homebuyers Seek Legal Recourse
Frustrated by the delays and financial losses, homebuyers approached the courts. Their petition was included in a batch of similar cases heard by the Supreme Court, all alleging a bank-developer nexus. In March, the Supreme Court ordered the CBI to register cases in connection with 20 petitions where the agency was already conducting inquiries. Additionally, the court directed the CBI to investigate 25 more cases without preliminary inquiry.
The court also mandated that the CBI can seek assistance from respective state police forces to aid in the investigations, emphasizing that these authorities are obliged to comply with the court's orders.
Broader Implications and Other Cases
Beyond the Chennai project, the CBI has registered cases against the Ozone group in connection with two other projects in Bengaluru, indicating a pattern of alleged misconduct across multiple developments. This investigation underscores the ongoing challenges in India's real estate sector, where homebuyers often face risks due to regulatory lapses and corporate malfeasance.
The case highlights the critical role of judicial oversight in protecting consumer rights and ensuring accountability in large-scale infrastructure projects. As the CBI continues its probe, stakeholders await further developments that could impact similar projects nationwide.
