Supreme Court Allows Sandesaras to Quash Criminal Charges After ₹5100 Crore Settlement in Fraud Case

On 25th November, the Supreme Court agreed to quash all criminal proceedings against the erstwhile Sterling Biotech directors and billionaires, Nitin and Chetan Sandesaras, on the condition that they pay ₹5100 crore to settle dues with the public banks that initiated fraud proceedings against the duo.

A bench of Justices JK Maheshwari and Vijay Bishnoi, on Monday, reasoned that once public money is deposited back with the lender banks, criminal proceedings in the matter can be brought to an end.

“It is apparent that since inception, this Court was of the view that if the petitioners are ready to deposit the amount as settled in OTS and public money comes back to lender banks, the continuation of the criminal proceedings would not serve any useful purpose,” the Court noted.

Thus, the Court directed that all criminal proceedings against the Sandaresas be quashed upon completion of the said deposit with the lender public-sector banks on or before December 17, 2025.

The amount is to be deposited with the Registry of the Court, either in a single payment or in multiple tranches, the Court added.

After the lender banks submit their claims, the Registrar (Judicial-Administration) will verify the dues and release the funds proportionately to each lender, with liberty to seek assistance from accounts personnel or approach the Bench for clarification if required, the Court noted further.

The Court also held that upon deposit and disbursement of the settlement amount, all related litigation connected to the loan accounts, FIRs and the approved one-time settlement will stand concluded as a full and final settlement.

It also clarified that these directions were issued in view of the peculiar facts of this case and are not to be treated as precedent in future cases.

In the Sterling Biotech fraud case, several criminal proceedings had been initiated by multiple agencies against the Sandesaras brothers and their CA (Chartered Accountant), Hemant S. Hathi.

In August 2017, the CBI registered corruption and cheating cases against them and subsequently filed charge sheets.

Around the same time, the ED (Enforcement Directorate) began money-laundering investigations, which led to prosecution complaints and the attachment and freezing of various assets.

The ED also initiated fugitive economic offender proceedings, declaring the accused persons as fugitives after they left the country.

The Sandesaras are currently based in Nigeria.

Separately, an SFIO (Serious Fraud Investigation Office) prosecution was also initiated under the Companies Act for corporate fraud, while the Income Tax Department filed cases under the Black Money Act relating to alleged undisclosed foreign assets against the accused persons.

The accused persons, Sandesaras brothers and Hemanth S Hathi, had sought the Supreme Court’s intervention to quash all proceedings arising out of the aforesaid complaints.

Now, the apex court has agreed to give a clean chit to all three accused persons, on the condition that they settle the due amount by paying ₹5100, as agreed upon by all public lenders and investigating agencies. 

(INPUTS FROM ANI)