For years, victims of financial fraud have heard the same reassurance from investigators: assets have been attached, properties seized and the accused prosecuted. Yet for homebuyers, depositors and investors who lost their life savings in real-estate frauds, chit fund collapses, investment schemes and banking scams, a simple question remained: when will the money recovered be returned to us?
Few understand that frustration better than Sumit Raghav. When he booked a flat in an SRS Group project in Faridabad in 2012, he believed he was making the most important investment of his life. Like thousands of middle-class Indians, he carefully planned his finances, availed a home loan and looked forward to moving his family into a house he could finally call his own. Possession was promised within a few years.
That day never came.
More than a decade later, Raghav is still waiting. The project became entangled in investigations, the promoters landed in legal trouble, properties were attached and construction ground to a halt. Through it all, he continued paying both rent and EMIs. “Every year we thought possession would happen soon. Instead, we spent years moving between courts, government offices and authorities looking for answers,” he says.
Raghav’s story reflects a recurring pattern across India. Victims spend their savings believing they are buying a home, investing for the future or securing their family’s financial well-being. When the schemes collapse, they are often left waiting for years while the wheels of the justice system turn slowly.
For decades, India’s response to financial crime focused on identifying wrongdoing, attaching assets and prosecuting offenders. Investigative agencies measured success through the value of assets seized and the number of searches conducted and cases filed. Yet for victims, the central question remained unanswered. If authorities had traced the money and secured the assets, why were those who suffered the losses still waiting?
That question is increasingly reshaping the country’s approach to financial frauds. Every year, thousands of cases involving cheating, criminal breach of trust, forgery and economic offences are registered across the country. What makes such frauds particularly devastating is that they are often built on trust. Promoters cultivate credibility over years. Investors are persuaded through personal relationships, local networks and assurances of safety. When those promises unravel, the consequences can last for decades.
The legal process generally begins long before the Enforcement Directorate enters the picture. Cases are initially registered by the police, the Central Bureau of Investigation or other investigative authorities. The offences—cheating, forgery, criminal breach of trust and conspiracy—are known as predicate or scheduled offences.
The ED, under director Rahul Navin, can then initiate a parallel investigation under the Prevention of Money Laundering Act if investigators believe the proceeds generated through those crimes have been concealed, layered through multiple transactions or projected as legitimate wealth.
One of the agency’s most powerful tools is attachment. Frequently misunderstood as confiscation, attachment is actually a temporary legal measure to preserve assets believed to be proceeds of crime. It prevents the sale, transfer or disposal of property while investigations and court proceedings continue.
But the dilemma is that properties remain tied up in litigation for years. For years, the system excelled at preserving assets but struggled to return value to those who had suffered losses.
This has increasingly led courts, regulators and enforcement agencies to embrace the idea of restitution.
At its core, restitution is based on a simple principle: if assets have been recovered from the proceeds of crime, victims should benefit from that recovery. Under Sections 8(7) and 8(8) of the Prevention of Money Laundering Act, special courts have the power to direct restoration of attached or confiscated property to victims of money laundering offences.
The distinction between attachment and restitution is crucial. Attachment protects assets. Restitution returns value. Legal experts argue that restitution serves a broader purpose. Financial systems function on trust. When victims see assets recovered but remain uncompensated, public faith in both markets and law enforcement erodes. Restitution therefore strengthens not only individual justice but confidence in institutions.
Few cases illustrate this better than Sahara. For decades, Sahara built an extraordinary presence across India, particularly in smaller towns and rural areas where access to formal financial services was often limited. Its agents became familiar figures in local communities. Families invested because neighbours invested. Investors trusted the organisation because relatives trusted it.
The controversy surrounding Sahara intensified after regulatory scrutiny of its fund-raising activities. The Securities and Exchange Board of India argued that the fund mobilisation exercise fell within its regulatory jurisdiction, triggering a prolonged legal battle.
In 2012, the Supreme Court directed Sahara companies to refund about Rs24,000 crore collected through the disputed instruments. A lengthy process involving verification of investors, reconciliation of records and resolution of claims followed. Receipts and certificates became precious documents. Families carefully preserved records because they represented the only proof that their savings existed.
The eventual release of funds from the Sahara-SEBI refund account for repaying eligible depositors represented a significant shift. It demonstrated that justice in financial crimes could not be measured solely through enforcement action. It also had to be measured through recovery for victims.
The case related to the Pearls Agro Corporation Ltd (PACL) scam further expanded this conversation. PACL attracted investors through schemes linked to land acquisition and ownership. For many lower- and middle-income families, the proposition was deeply appealing. Land has always represented security and social mobility in India. Investors believed they were participating in a pathway toward ownership and stability.
Investigators later alleged that PACL operated an illegal collective investment scheme and mobilised enormous sums from investors across the country. Recognising the unprecedented scale of the challenge, the Supreme Court constituted the Justice R.M. Lodha committee in 2016. The committee was tasked with identifying, valuing, liquidating and monetising PACL assets so that proceeds could eventually be distributed among investors. For perhaps the first time on such a scale, victim compensation became the central objective of a structured institutional mechanism.
For homebuyers, the stakes are even more personal. Unlike investors, they are not seeking returns; they are seeking homes. Families plan entire lives around promised possession dates. This is the reality faced by thousands of buyers associated with the SRS Group. Raghav expected to take possession of his flat within a few years of booking it. But the project stalled and uncertainty became a feature of his life. “You can calculate the EMI. You can calculate the rent,” he says. “But how do you calculate fourteen years of waiting?”
His frustration is echoed by Balvender Singh, president of the Residents’ Welfare Association at SRS Royal Hills. “The restoration of properties is a positive step, but buyers need practical relief,” he says. “People need possession, registration and legal ownership. Until that happens, the struggle continues.”
The evolution of restitution can be seen across sectors—from housing projects in north India to banking frauds and chit-fund scandals in the east. In many ways, eastern India has become one of the most significant testing grounds for this approach. West Bengal and neighbouring states, which have witnessed some of the country’s largest financial scandals, are becoming laboratories for restitution.
A significant recent example involves Kolkata-based Shree Ganesh Jewellery House (India) Pvt Ltd. Investigators say the company’s promoters—Nilesh Parekh, Umesh Parekh and Kamlesh Parekh—used a network of domestic and overseas entities to facilitate transactions involving gold, bullion and jewellery. Companies in Dubai, Singapore and Hong Kong formed part of the structure.
According to investigators, the fraudulent diversion of loan funds amounted to Rs2,672 crore, affecting a consortium of 25 banks. Liquidator Anup Kumar Singh of Steller Insolvency Professionals LLP says admitted claims have crossed Rs4,000 crore after accounting for accumulated interest and related liabilities.
Traditionally, assets attached in such cases could remain tied up in litigation for years. The emerging restitution framework seeks to change that.
A significant development came in November 2025 when the Enforcement Directorate and the Insolvency and Bankruptcy Board of India established a cooperation framework to facilitate the monetisation and resolution of attached assets through insolvency processes.
Under the framework, attached assets can be transferred to insolvency professionals, valued, auctioned and monetised. The proceeds then become available for distribution in accordance with the Insolvency and Bankruptcy Code. For banks, it represents a realistic pathway towards recovery.
Another example involves Prakash Vaniya Pvt Ltd. Investigators alleged that promoter Manoj Kumar Jain defrauded the Central Bank of India to the tune of Rs234.57 crore by inflating financial statements and forging documentation. The Enforcement Directorate attached properties in West Bengal and Chhattisgarh valued at approximately Rs199.67 crore.
Following discussions between investigators and the bank, an application was filed seeking restitution of attached properties. The court ultimately permitted restoration, recognising the bank’s legitimate claim to recovery.
While banking frauds involve institutional victims, chit fund scams present an even greater challenge because the victims number in lakhs.
The history of such schemes in eastern India stretches back decades. In many parts of West Bengal, Bihar, Assam, Jharkhand and Odisha, formal banking penetration remained limited for years. Informal savings networks, deposit schemes and chit funds filled that gap. Some operated legitimately, while others became vehicles for large-scale fraud.
The Saradha and Rose Valley scandals exposed the devastating consequences. The Saradha collapse in 2013 affected thousands of investors across eastern India. Rose Valley became even larger, with investigators alleging that approximately Rs17,520 crore was mobilised through various schemes spanning multiple states.
Unlike banking frauds, where the victims are identifiable institutions, chit fund scams involve lakhs of individuals. Claims need to be verified, assets identified and monetised, and payments accounted for. Progress is being made. In April 2025, Union Minister of State for Finance Pankaj Chaudhary handed over restitution assets worth Rs515.31 crore to the asset disposal committee headed by retired Justice D.K. Seth. The restitution process is expected to benefit around 7.5 lakh verified investors from among more than 31 lakh claims received. Investigators traced more than 2,900 bank accounts linked to investor funds during the probe.
Similarly, the Saradha restitution process continues under the supervision of the Calcutta High Court. The Justice Sailendra Prasad Talukdar committee is overseeing monetisation and restitution using properties attached during investigations. Earlier this year, the court directed the release of detailed accounts and reports connected to restitution efforts, reinforcing transparency for affected depositors.
For millions of Indians like Raghav, who made investments that never delivered what they promised, restitution represents more than compensation. “We don’t want sympathy,” he says. “We only want what we paid for.”
