Govt rejects Highrich's ₹15 cr settlement offer, HC directs ₹200 cr be moved to treasury account

Kochi: The state government snubbed an offer made by Highrich Online Shoppe Pvt Ltd, accused of running a ₹3,141-crore Ponzi scheme, to settle with the complainants directly, and said it can play only by the Banning of Unregulated Deposit Schemes (BUDS) Act.

Meanwhile, the High Court of Kerala ordered that the over ₹200 crore frozen in various bank accounts of Highrich under the BUDS Act be moved to the interest-bearing Treasury deposit within two weeks.

Justice Gopinath P, on July 21, passed the order on a criminal appeal filed by the company and two of its directors, Kollat Dasan Prathapan and Kattukaran Sreedharan Sreena, challenging the confirmation of attachment by the Designated Court in Thrissur.

When contacted, Director General of Prosecution Adv T A Shaji said he proposed that the money be moved to an interest-bearing account because it was not earning any returns in the company's current accounts.

In his judgment, Justice Gopinath said he directed the transfer of the money -- admittedly over ₹200 crore -- to a treasury deposit for the benefit of depositors.

The court directed the Competent Authority under the BUDS Act to execute the transfer and inform the court of the deposit details and applicable interest rate.

The court also allowed the company and its directors to attempt a settlement with the depositors in the interim. The matter will be taken up next on August 13.

Meanwhile, Director General of Prosecution (DGP) Adv Shaji told Onmanorama that the government had no objection to Highrich settling directly with the depositors. "But the government cannot be a party to that. We can only go by the BUDS Act, which has specific steps to disburse the money to the victims," he said.

Highrich wanted the government to release the money (₹200 crore) attached under the BUDS Act as only around ₹10 crore to ₹15 crore was in dispute by around 76 complainants.

But in all, there are around 14 lakh depositors, said Adv Shaji. The Chief Minister had told the Assembly that these depositors -- from Kerala and outside -- had invested around ₹3,141.34 in various schemes of Highrich.

When Highrich made the settlement offer, the judge on July 11 directed the government to submit "a comprehensive scheme for payment to the victims".

"The government refused to give any scheme as it is against the provision of the BUDS Act," Special Government Pleader to DGP Adv P Narayanan told Onmanorama.

To be sure, the Competent Authority of the BUDS Act Bishwanath Sinha, who is also the Additional Chief Secretary to the government, wrote to the DGP on July 17 saying that "the proposal for the government to frame an alternative scheme for disbursal of funds to the victims shall be against the spirit and intent of the BUDS Act".

The Act specifically provides a structured legal mechanism for the attachment, absolutise, and distribution of proceeds from financial crimes. Any deviation from this legislative framework through an externally imposed scheme could be interpreted as bypassing or undermining the statutory mandate. "If the government itself initiates a scheme outside the scope of the BUDS Act, it would render the provision of the Act ineffective or redundant," the competent authority wrote. Onmanorama has a copy of the letter.

In Highrich’s case, the Competent Authority has followed the process step by step: It has provisionally attached over ₹200 crore in various bank accounts of Highrich; the attachment was then placed before the Designated Court in Thrissur, which confirmed the provisional orders, giving the government full control over the seized assets.

Now, as per the high court order, it is in the process of moving the money to a treasury deposit where it will accrue interest.

Under Section 12 of the BUDS Act, any amount due to depositors shall be paid in priority over all other debts and all revenues, taxes, cesses and other rates payable to the government or the local authority.

“The BUDS Act is a powerful tool to crack down on illegal deposit schemes and ensure restitution for victims. But without a clear timeframe, depositors risk being left in indefinite limbo,” said Dr Riju Aikkal, who is coordinating the victims' legal battle.

Highrich wanted the government to release the money (₹ 200 crore) attached under the BUDS Act as only around ₹10 crore to ₹15 crore was in dispute by around 75 complainants. Kannur has registered the highest number of cases, with 19 FIRs.