The Kerala High Court on Tuesday pulled up the Competent Authority under the Banning of Unregulated Deposit Schemes (BUDS) Act, 2019, for its continued inaction and failure to comply with court directives in the Popular Finance unregulated deposit scam. Around 30,000 investors were defrauded of nearly ₹2,000 crore.

A Division Bench comprising Justice Raja Vijayaraghavan V and Justice K V Jayakumar, while hearing a batch of writ appeals, expressed strong displeasure over the persistent non-compliance with the Court’s orders.

The Bench noted that the matter has been pending since 2020 and reviewed the series of directions issued since early 2025. Despite multiple orders, the Competent Authority, an officer of the rank of Additional Chief Secretary in the Home Department, had failed to file applications before the designated court within the statutory time limit to make provisional attachments of the company’s assets absolute.

The Court observed that the Competent Authority under the BUDS Act holds wide-ranging powers, including the responsibility to share information under Section 11, issue provisional attachment orders, open bank accounts for depositing collected funds, order the sale of perishable assets, and file confirmation petitions before the designated court.

“It appears, however, that the Competent Authority has treated the directions issued by this Court in a casual and perfunctory manner, disregarding the onerous statutory obligations entrusted under the Act. Such indifference to compliance undermines both the statutory scheme and the authority of this Court,” the Bench noted.

The Court recorded that several provisional attachment orders against the movable and immovable assets of Popular Finance Pvt Ltd and its promoters had lapsed due to the non-filing of confirmation petitions within the required 30 to 60-day window.

Although the Court had repeatedly directed the Competent Authority to coordinate with District Collectors and ensure timely filing, the Government Pleader admitted that compliance remained incomplete in most districts. Reports were received only from the Collectors of Thiruvananthapuram, Kollam, and Thrissur, with no updates from other districts.

“Even after this Court had issued repeated reminders months in advance, all that has been stated is that instructions were issued to the District Collectors, without any demonstrable follow-up or accountability to ensure compliance. Such callous inaction and blatant disobedience of the orders of this Court cannot be countenanced,” the Bench remarked.
(With LiveLaw inputs)