Supreme Court Clears Sterling Biotech Promoters in ₹5,100 Crore Settlement, Raises Questions for Mallya and Nirav Modi
Sandesara brothers to walk free if they pay settlement; SC drops criminal charges in bank fraud case
Judgment sparks debate on whether Vijay Mallya, Nirav Modi, and other fugitives can seek similar relief
By Our Legal Correspondent
New Delhi: November 26, 2025:
In a landmark decision, the Supreme Court of India has agreed to drop all criminal proceedings against fugitive businessmen Nitin and Chetan Sandesara, promoters of Sterling Biotech Ltd and Sterling SEZ & Infrastructure Ltd, provided they deposit ₹5,100 crore by December 17, 2025. The ruling, delivered by a bench of Justices J.K. Maheshwari and Vijay Bishnoi, marks one of the most significant settlements in India’s history of economic offences.
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The Sandesara brothers, accused of defrauding Indian banks of more than $1.7 billion (₹14,000 crore), fled the country in 2017 and were declared fugitive economic offenders in 2018 alongside Vijay Mallya, Nirav Modi, and Mehul Choksi.
Background of the Case
- The Sandesara brothers built a diversified conglomerate from a small tea-trading business, expanding into pharmaceuticals, oil, and infrastructure.
- Their flagship company, Sterling Biotech, defaulted on massive loans, leading to allegations of fraud, money laundering, and corruption.
- Investigations by the CBI, ED, and SFIO accused them of siphoning funds and creating shell companies abroad.
- In 2018, they were declared fugitive economic offenders under the Fugitive Economic Offenders Act.
Despite these charges, the brothers negotiated a one-time settlement (OTS) with lenders, offering to pay ₹5,100 crore, roughly one-third of their total dues.
Supreme Court’s Observations
The apex court made several key points:
- Extraordinary Powers: The Court exercised its extraordinary jurisdiction to allow settlement, noting the peculiar facts of the case.
- Conditional Relief: Criminal proceedings will be dropped only if the brothers deposit the settlement amount by December 17, 2025.
- Scope of Order: The Court clarified that the ruling is specific to this case and does not set a general precedent.
- Clean Slate: If payment is made, charges of corruption, money laundering, tax violations, and offences under the Companies Act will be quashed.
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Legal Significance
This ruling is unprecedented in India’s economic offence jurisprudence:
- First Major Settlement: It is the first time fugitive offenders have been allowed to settle criminal charges through payment.
- Potential Precedent: Though the Court insists it is case-specific, legal experts believe others like Mallya and Nirav Modi may attempt similar settlements.
- Judicial Flexibility: The judgment shows the Court’s willingness to balance recovery of public money with closure of prolonged litigation.
Impact on Other Cases
The ruling has sparked debate on whether similar relief could be extended to other high-profile fugitives:
- Vijay Mallya: Founder of Kingfisher Airlines, accused of defaulting on loans worth ₹9,000 crore.
- Nirav Modi: Diamond merchant accused in the ₹13,000 crore PNB scam.
- Mehul Choksi: Co-accused in the PNB fraud, currently in Antigua.
Legal experts caution that while the Sandesara case involved a concrete settlement offer, other fugitives may face different circumstances, making blanket relief unlikely.
Industry and Expert Reactions
- Banking Sector: Lenders have welcomed the recovery of ₹5,100 crore, though concerns remain about setting a precedent.
- Legal Experts: Some argue the ruling undermines the deterrent effect of declaring fugitives, while others see it as pragmatic.
- Policy Analysts: The case highlights the tension between recovering public money and upholding accountability.
Broader Significance
The ruling reflects India’s evolving approach to economic offences:
- Focus on Recovery: Courts may prioritize recovery of dues over prolonged criminal trials.
- Global Attention: The case has drawn international attention, as India grapples with high-profile fugitives abroad.
- Policy Debate: It may prompt discussions on whether settlements should be institutionalized for economic offences.
Conclusion
The Supreme Court’s decision to allow the Sandesara brothers to settle their ₹5,100 crore bank fraud case marks a turning point in India’s handling of fugitive economic offenders. While the Court insists the ruling is case-specific, it has inevitably raised questions about whether Vijay Mallya, Nirav Modi, and Mehul Choksi could seek similar relief.
For India’s financial system, the judgment underscores the importance of balancing recovery of public money with deterrence against fraud. The coming months will reveal whether this extraordinary settlement remains an isolated case or sparks a broader trend in economic offence jurisprudence.
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