The court ruled that a Settlement Scheme cannot be processed until legal proceedings under the BUDS Act are resolved, emphasizing the statutory framework for handling deposit claims.

JUDGMENT

Dated this the 30^th day of January, 2026

1. The Petitioner is a Private Limited Company. The Petitioner has filed this Writ Petition, represented by its Director, seeking direction to the Respondent Nos.1 to 4 to consider, approve, and implement Ext.P6 Settlement Scheme proposed by the Petitioner for the purpose of settlement of claims of depositors and revival of the Company's operations under the supervision of this Court by appointing a mediator.

2. I heard the learned Counsel for the Petitioner, Sri. Gayathri Muraleedharan and the learned Government Pleader, Sri.K.R.Renjith, who appeared for Respondent Nos.1 to 4.

3. The learned Counsel for the Petitioner contended that the Petitioner – Company had been engaged in legal business. Ext.P3 FIR is registered at the instance of a person who is a stranger to the Company who has not even deposited any money with the Petitioner - Company. The Competent Authority under the Banning of Unregulated Deposit Schemes Act, 2019 (‘BUDS Act’, for short) passed Ext.P4 Order attaching all movable & immovable properties and deposits of the Petitioner – Company on the basis of Ext.P3 FIR. As of now, the total complaints registered against the Petitioner Company are only 67 numbers, in which the total amount involved is Rs.6,69,12,267/-. The Company has got memberships of more than 16 lakh, of whom the complaints are registered by only 66 members against the Company. The said members caused to register the crimes on false and misunderstood allegations when the Ext.P3 FIR was registered against the Petitioner – Company. On account of the registration of the aforesaid crimes, the Managing Director of the Petitioner - Company has been continuing in custody even now. The Company has enough resources to settle all genuine claims raised by the De facto complainants in the aforesaid complaints and verified subscribers. On account of the attachment of the properties and deposits of the Company, the Company is not able to arrive at a settlement with the persons who have raised claims against the Company. The learned Counsel invited my attention to Ext.P5 Interim Order passed by this Court in Crl.A. No.477/2025 filed by the Petitioner and its Directors in which this Court has specifically observed that it will be open to the appellants therein and the claimants in various cases against the first appellant therein, to attempt to arrive at any settlement. Ext.P6 Settlement Scheme formulated by the Petitioner - Company is perfectly legal and it is a practical solution to settle all the claims against the Company. The facts and circumstances of the case demand appointment of a Mediator by this Court to settle the claims of depositors and revival of the Company’s operations under the supervision of this Court in accordance with Ext.P6 Settlement Scheme.

Per contra

4. , the learned Government Pleader contended that the Petitioner has no right to seek consideration of the Ext.P6 Settlement Scheme put forward by the Petitioner. Even assuming that the Petitioner has such a right, Ext.P6 is not prepared by any Chartered Accountant and it is not certified by him. If at all the Petitioner is having any bona fide intention to settle the disputes, it is for the Petitioner to approach the Designated Court under the BUDS Act in this regard. The learned Government Pleader invited my attention to Section 18 of the BUDS Act which defines the powers of the Designated Court, particularly clause (g) of subsection (1) therein, which provides the power to the Court to pass any order which the Court deems fit for the realisation of assets of the deposit taker and for payment of the same to the depositors of such deposit taker or on any other matter or issue incidental thereto.

5. I have consider