In a landmark judgment that concludes one of India's most significant banking fraud cases, the Supreme Court has officially closed all civil and criminal proceedings against the Sterling Group. This decisive action came after the fugitive promoters, Nitin and Chetan Sandesara, offered to deposit Rs 5,100 crore as full and final settlement with lender banks and investigating agencies.
The Division Bench of Justices J K Maheshwari and Vijay Bishnoi delivered the order on November 19, bringing down the curtains on a legal saga that involved approximately Rs 15,000 crore in bank exposures. The court emphasized that its primary objective throughout the litigation had been the recovery of public money.
The Long Road to Settlement
The Sterling Group's troubles began when what started as a pharmaceutical operation in Gujarat expanded rapidly into energy projects and Nigerian ventures through Sterling Oil Resources. This growth was fueled by loans from a consortium of public-sector and overseas lenders.
By the mid-2010s, serious questions emerged about how the group utilized these loans and disclosed its financial information. The situation escalated in 2017 when the Central Bureau of Investigation registered FIRs alleging diversion of loan proceeds through related entities.
Around this critical period, the Sandesara brothers left India using Albanian passports and never returned, triggering multiple legal proceedings across various forums. Their current location is Nigeria, where they operate Sterling Oil Exploration & Energy Production Co. Ltd.
Multi-Agency Legal Battle
The case demonstrates how complex financial fraud can activate nearly every major economic offense law in India. The CBI initially invoked charges of cheating, forgery, and conspiracy under the Indian Penal Code, along with provisions of the Prevention of Corruption Act to examine whether bank officials failed in their duties.
These initial offenses triggered the Enforcement Directorate's jurisdiction under the Prevention of Money Laundering Act (PMLA). The ED registered its own cases and attached properties believed to represent the value of alleged proceeds of crime.
Simultaneously, lenders pursued recovery through insolvency proceedings while the Serious Fraud Investigation Office examined the internal affairs of Sterling group companies under the Companies Act, 2013. The Income Tax Department also invoked the Black Money Act concerning undisclosed foreign income and assets.
Most significantly, proceedings under the Fugitive Economic Offenders Act were initiated after the promoters repeatedly failed to return to India despite notices.
Supreme Court's Conditional Closure
The Supreme Court grounded its reasoning in Article 142 of the Constitution, which empowers the court to issue orders necessary for doing complete justice. The Bench noted that since the litigation's inception, the court's primary focus had been protecting public money and recovering defalcated amounts.
The order establishes a detailed process: the Rs 5,100 crore must be deposited by December 17, 2025, and placed in a short-term interest-bearing fixed deposit with the Court registry. Lender banks must file verified claims, after which the registrar will disburse amounts proportionately based on established dues.
Only after completing this exercise will all proceedings - including FIRs, ED cases, charge sheets, property attachments, prosecutions under the Companies Act, and action under the Fugitive Economic Offenders Act - stand quashed.
The Bench specifically addressed potential broader implications, stating that this ruling is confined to the particular facts of this case and shall not be treated as precedent regarding whether restitution can substitute for criminal prosecution in financial offense matters.
The Supreme Court's order effectively closes every civil, criminal, and enforcement proceeding tied to the Sterling Group, marking the conclusion of one of India's most complex and high-value banking fraud cases that spanned multiple jurisdictions and legal frameworks over several years.
