In a landmark decision that could reshape how India handles high-value economic offenses, the Supreme Court has approved the closure of criminal proceedings against fugitive businessmen Nitin and Chetan Sandesara of Sterling Biotech Ltd. The historic order came after the brothers agreed to pay ₹5,100 crore as a one-time settlement to resolve multiple cases filed by investigating agencies.
Unprecedented Legal Settlement
The Supreme Court bench comprising Justices JK Maheshwari and Vijay Bishnoi delivered the groundbreaking judgment on November 19, allowing the Sandesara brothers and their associates to walk free from criminal charges. The decision marks the first instance where India's apex court has permitted the dropping of criminal proceedings in a multi-crore bank fraud case following a financial settlement.
The Centre and Enforcement Directorate both consented to the proposal after extensive consultations with various agencies pursuing cases against the Sandesaras. The brothers have been given until December 17, 2025 to deposit the massive settlement amount with the court registry, which will then distribute the funds to lender banks on a proportionate basis.
Court's Rationale and Conditions
The bench justified its decision by emphasizing that the continuation of criminal proceedings would serve no useful purpose since public money is returning to lender banks. The court noted that the primary focus of the proceedings from the beginning had been to recover public funds, and the accused had now agreed to repay the amount.
However, the Supreme Court took precautions to ensure this case doesn't become a precedent for other fugitive economic offenders. The order explicitly states that this decision should not be treated as a precedent for similar cases, acknowledging concerns within the government about potential implications for other high-profile fugitives like Nirav Modi and Vijay Mallya.
Background of the Sterling Biotech Case
The Sandesara brothers have been fugitives since 2017, moving between countries including Nigeria, the UAE, the UK, and the US to evade arrest. The Enforcement Directorate had declared them Fugitive Economic Offenders in September 2020, along with Chetan's wife Dipti and family member Hitesh Patel.
Investigating agencies had attached assets worth more than ₹14,500 crore in this case, including ₹4,700 crore in India and over ₹9,778 crore overseas. The attached properties included oil rigs, ships, aircraft, and real estate holdings across multiple countries.
The case also had political ramifications, with late Congress leader Ahmed Patel among dozens investigated for their alleged dealings with the Sandesaras. The extensive investigation and asset attachments eventually put significant pressure on the brothers, choking their financial resources and leaving them with limited options beyond negotiation.
Financial Implications and Recovery
The settlement represents a substantial recovery for banks that had extended loans to Sterling Biotech. The Sandesaras owed over ₹14,000 crore to banks, including interest and penalties. Prior to this settlement, banks had already recovered approximately ₹3,500 crore through deposits by the fugitive siblings and property sales worth ₹1,100 crore through insolvency proceedings.
With the ₹5,100 crore settlement, the total recovery will reach ₹8,600 crore - considered a significant achievement given that banks often accept haircuts of up to 80% during insolvency proceedings. Government sources revealed that the acceptance of the settlement offer was partly driven by the difficulty in realizing attached assets located in foreign jurisdictions, where most were paper attachments and foreign countries weren't cooperating with ED orders.
The Supreme Court's decision represents a pragmatic approach to complex economic offenses where recovery of public funds takes priority, while maintaining that this shouldn't become a standard practice for other fugitive economic offenders seeking similar relief.
