Popular Finance Scam: Kerala High Court Closes Plea Seeking Action On SFIO Investigation After Centre Says Criminal Complaints Already Filed

The company is part of the Popular Finance Group that orchestrated the ₹2000 crore scam, known as the “Popular Finance Scam”.

Justice Viju Abraham closed the writ petition recording the submission that the Centre has already filed criminal complaints before the Additional Sessions Court, Ernakulam and that it has also initiated winding up proceedings of the company.

The petitioner before the Court was a registered association, MRPN Minority Shareholders Customers Welfare Association, whose members were the investors who lost money by depositing in Mary Rani Popular Nidhi Ltd., a Nidhi company regulated by the 2014 Nidhi Rules.

According to the plea, the company solicited deposits from shareholders promising high interest rates and thereafter, its promoters siphoned off the same into foreign accounts located in Australia and UAE.

In a November 2020 order, the High Court had directed that the investigation into the high-scale scam be transferred to the CBI. In 2021, the Central Government had passed an order handing over investigation into the affairs of the company to the SFIO.

Presently, the Enforcement Directorate and the Authority under the BUDS Act (Banning of Unregulated Deposit Schemes) are also proceeding against the Group.

Following this, in June 2025, the High Court had passed another order directing the SFIO to complete investigation within 3 months in another plea (WPC No. 39488 of 2024) preferred at the instance of the petitioner association.

After learning that the SFIO had already completed its probe and final report has been submitted, the shareholders' association was seeking further action. Since Nidhi companies are exempt from the BUDS Act, they have been denied swift recovery mechanism available to other victims of the fraud, they had stated.

“the failure of the Respondent No.l [Union of India] to exercise its power under Companies Act 2013 by earmarking Mary Rani Popular Nidhi's assets for its specific shareholders will result in asset- intermingling whereby the assets of Mary Rani Popular Nidhi Limited shall be subsumed into the common pool of assets of Popular Finance Group… most of members of the Petitioner association are senior citizens who deposited their life's savings with Mary Rani Popular Nidhi Limited,” they had submitted.

They had, thus, sought the Union to take immediate legal proceedings based on the Final Report to launch prosecution under the Companies Act and to wind up the company.

Based on the submission, the Court closed the plea thus:

“The learned Deputy Solicitor General of India, on instructions, submits that criminal complaints have already been preferred before the Additional Sessions Court, Ernakulam and that they are also initiated proceedings for winding up of the Company, which may require another 4 weeks. Recording the said submission, this writ petition is closed.”

Case No: WP(C) No. 555 of 2026

Case Title: MRPN Minority Shareholders Customers Welfare Association v. Union of India and Ors.

Citation: 2026 LiveLaw (Ker) 284

Counsel for the petitioner: Nebil Nizar, N. Krishna Moorthy, Akhil J. Chandran

Counsel for the respondent: O.M. Shalina - Deputy Solicitor General of India

Click to Read/Download Judgment

Click to Read/Download Judgment in WPC No. 39488 of 2024