PMLA court orders Rs 65 crore restitution in Popular Finance case

What the Record Shows

The Popular Finance matter has moved into its recovery phase. As reported, the PMLA Special Court at Ernakulam directed on 10 February 2026 that Rs 65.07 crore of assets attached in the case - about Rs 33.20 crore in movables and Rs 31.87 crore in immovables - be handed to the Competent Authority under the deposit-banning law for distribution to depositors of the Kollam-based Popular Finance group. That is a restitution step for those said to have lost money, not a finding of guilt against anyone.

The criminal case itself remains an allegation pending trial. The Enforcement Directorate registered ECIR/KCZO/32/2020 and, per the ED's case as recorded by the Kerala High Court, alleged that the group collected about Rs 1,000 crore from roughly 3,000 depositors through 258 branches by promising attractive interest rates, in contravention of the law governing deposit-taking. The ED alleges offences of money laundering under Sections 3 and 4 of the Prevention of Money Laundering Act, built on predicate offences including Sections 120B, 420, 406 and 409 of the Indian Penal Code and the Banning of Unregulated Deposit Schemes Act.

The ED arrested Thomas Daniel, described as the Managing Director of the group, on 9 August 2021, and his daughter, named as the group's chief executive, was also arrested. On 18 October 2021 the ED provisionally attached assets valued at Rs 31.16 crore, including 32 kg of depositors' gold lying across 1,132 bank accounts, along with immovable properties in Kerala, Tamil Nadu and Andhra Pradesh, luxury vehicles and fixed deposits.

How It Worked

The mechanism set out below is what the ED alleges, as recorded in the High Court order, and remains to be established at trial. Investigators allege that an unincorporated finance group solicited deposits from the public at high promised returns without the authorisation such deposit-taking requires, and that the money was not held as depositors were led to believe.

The gold limb is the distinctive one. Per the ED's case, gold ornaments that ordinary customers had pledged for gold loans were re-pledged with banks and non-banking financial companies to raise fresh borrowings, identified in about 1,132 cases, and the proceeds were routed to the promoters and applied to property, vehicles and deposits. The consequence the ED alleges is that depositors and gold pledgors both ranked behind the re-pledgee lenders, who held the security. The High Court order also records the ED's allegation that funds were routed through entities in employees' names and moved abroad, including through hawala channels.

The procedural history is long. Kerala Police registered more than 1,300 FIRs across the state's districts; the Kerala High Court transferred the investigation to the CBI in November 2020; the ED opened its money-laundering probe and made its arrests in August 2021 and its attachment in October 2021. The case has since proceeded through bail litigation and, in February 2026, to the restitution order. Every characterisation in this account is an allegation attributed to the investigating agencies, not a proven fact.

Who Lost Money

The scale alleged is large and the affected group is wide. The ED's case puts the sums collected at about Rs 1,000 crore from roughly 3,000 depositors, and separately identifies gold-loan customers whose pledged ornaments were, it alleges, re-pledged without their knowledge. On the criminal side, more than 1,300 FIRs across Kerala reflect how many people say they were affected.

What depositors will actually recover is a smaller and still unsettled figure. The Rs 65.07 crore released to the Competent Authority in February 2026, and the Rs 31.16 crore attached in 2021, are the sums the process has reached, against claimed collections of around Rs 1,000 crore. As with most deposit-default recoveries, the distribution is likely to return a fraction of what was deposited, and the final percentage depends on how the attached properties and the 32 kg of gold are realised and how competing claims, including those of the re-pledgee lenders, are resolved.

Where recovery is still being worked through the Competent Authority, it is accurate to say that money is being returned but that the headline Rs 1,000 crore is a claimed exposure, not a sum any depositor should expect back in full.

Where It Stands Now

The position as of the record reviewed is twofold. On recovery, the PMLA Special Court has released Rs 65.07 crore to the Competent Authority for distribution to depositors, and that process is under way. On the criminal case, the matter is pending trial: the trial court has yet to decide the charges, and no accused has been convicted on this record.

On the accused, the Kerala High Court dismissed the bail application of the Managing Director, Thomas Daniel, on 5 May 2022, citing the gravity of the allegations and other factors, while his daughter had been released on bail under the proviso to Section 45(1) of the PMLA. Those are decisions on custody, not on guilt, and the charges themselves remain untried.

An FIR, a chargesheet and a provisional attachment contain allegations, not findings of guilt; the accused are presumed innocent until proven guilty, and due process continues. Readers can follow how such recoveries proceed through the enforcement archive, alongside other PMLA matters such as the Indore civic fake-bill complaint and the Alirajpur school-fund case.

What It Means

The matter is a textbook example of the unregistered finance company, and of why the perimeter around deposit-taking exists. Collecting public deposits is a regulated activity: a genuine non-banking financial company must be registered with the Reserve Bank of India, and an entity taking deposits at high promised returns without that authorisation sits outside the safeguards that protect depositors. The re-pledging allegation shows the second-order risk - that collateral a customer believes is safely held can, if the record is to be believed, be pledged again to someone else who then ranks ahead of the customer.

The practical protection is checkable before money changes hands. The Reserve Bank of India publishes a register of authorised NBFCs and runs the Sachet portal to flag unauthorised schemes, and a depositor can compare a promised return against what a regulated fixed deposit actually pays using a simple FD calculator. A return well above the regulated market, offered by a firm you cannot find on the RBI register, is the documented warning sign in cases of this kind.

The wider takeaway is about process. A large deposit default resolves slowly, through attachment, restitution and trial, and the restitution order here shows the system returning assets to victims even before the criminal case concludes. That sequencing, rather than any single dramatic figure, is how depositor recovery actually works while the allegations are tested at trial.

FAQ

Does a chargesheet mean the people named are guilty?

No. An FIR, a chargesheet and a provisional attachment contain allegations, not findings of guilt. The accused are presumed innocent until proven guilty, the ED's case is yet to be tried before the trial court in Ernakulam, and due process continues.

What did the PMLA Special Court order?

Per the reported order dated 10 February 2026, the PMLA Special Court, Ernakulam directed that Rs 65.07 crore of attached assets - about Rs 33.20 crore in movables and Rs 31.87 crore in immovables - be handed to the Competent Authority for distribution to depositors. It is a restitution step, not a verdict on guilt.

Have depositors got their money back?

Not yet in full. Assets have been released to the Competent Authority for distribution, but the recovery percentage for roughly 3,000 depositors is not yet settled and depends on how the properties and gold are realised and claims verified. Such restitution typically returns a fraction of the sums claimed.

What is the ED alleging about the gold?

Per the ED's case as recorded by the Kerala High Court, gold that customers had pledged for gold loans was re-pledged with banks and NBFCs to raise fresh borrowings, in about 1,132 cases, without the pledgors' knowledge. That allegation is yet to be established at trial.

How can I check whether a finance company is authorised to take deposits?

The Reserve Bank of India maintains a public register of authorised NBFCs, and its Sachet portal lists entities and warns about unauthorised schemes. A firm collecting public deposits at high promised returns without RBI authorisation is a documented risk pattern.

Where can I read the official record?

The Kerala High Court bail order in B.A. No. 7709 of 2021, dated 5 May 2022, is reported on Indian Kanoon and sets out the ECIR, the alleged mechanism, the predicate offences and the attachment figures.

This report is based on the order of the Kerala High Court dated 5 May 2022 in B.A. No. 7709 of 2021 and the subsequently reported PMLA Special Court restitution order of 10 February 2026, reviewed on 2 August 2026.