Supreme Court Greenlights Sterling Biotech's Massive Fraud Settlement
The Supreme Court of India has given its conditional approval to drop criminal proceedings against the promoters of Sterling Biotech Ltd in a high-profile bank fraud case. The court's decision hinges on the company depositing a massive Rs 5,100 crore as full and final settlement of outstanding dues by December 17, 2025.
The Court's Detailed Order and Conditions
A bench comprising Justices J K Maheshwari and Vijay Bishnoi delivered the significant ruling on November 24, 2025. The court explicitly stated that the quashing of proceedings would only become effective upon the successful deposit of the agreed amount. "The writ petitions filed by the petitioners are allowed directing quashing of the proceedings... The said quashing would be operative on deposit of Rs 5,100 crores as a full and final payment based on consensus, on or before 17.12.2025," the bench declared in its order.
The court was addressing petitions filed back in 2020 by promoters Hemant S. Hathi and Chetan Jayantilal, who sought relief from the ongoing criminal proceedings. The bench permitted the petitioners to make the payment in separate tranches on different dates, providing some flexibility in meeting the substantial financial obligation.
Previous Payments and Total Financial Picture
This settlement amount comes in addition to significant sums already recovered through various channels:
- Rs 3,507.63 crore already deposited voluntarily by the promoters
- Rs 1,192 crore recovered by banks through proceedings under the Insolvency and Bankruptcy Code (IBC), 2016
The court revealed that the original FIR indicated a defalcation amount of Rs 5,383 crore. However, the One Time Settlement (OTS) covered a larger sum - Rs 3,826 crore for all Indian companies of the petitioners and Rs 2,935 crore for foreign companies acting as guarantors, bringing the total OTS amount to Rs 6,761 crore.
Comprehensive Settlement and Legal Implications
The court emphasized that this settlement would bring complete closure to multiple legal battles. "The petitioners intend to put quietus of the litigation with respect to CBI, ED, attachments under PMLA, Fugitive Act, SFIO, pertaining to black money and Income Tax," the order noted.
Importantly, the Supreme Court made it clear that this decision sets no legal precedent. "These directions as issued are in peculiar facts of this case, therefore, they shall not be treated as precedent," the bench clarified, indicating the unique circumstances surrounding this particular matter.
The court also outlined the disbursement process, stating that upon receipt of the amount, it would be placed in a short-term interest-bearing fixed deposit account with a nationalized bank. The funds would then be distributed to lender banks on a proportionate basis according to their respective dues.
This landmark decision reflects the judiciary's focus on recovering public money while considering the practical aspects of lengthy legal proceedings. The court observed that since the beginning of the case, it had maintained that if petitioners were ready to deposit the settled amount and public money could be returned to banks, continuing criminal proceedings might not serve any useful purpose.
