New Delhi: The Supreme Court has agreed to drop all criminal proceedings against the fugitive Sandesara brothers in a multi-crore bank fraud case if they deposit Rs 5,100 crore with the top court’s registry by 17 December.
In an extraordinary decision with sweeping consequences, the SC on 19 November sanctioned the settlement that will lead to the quashing of criminal and civil proceedings against the two petitioners—Hemant S. Hathi and Chetan Jayantilal.
Billionaire brothers Nitin and Chetan Sandesara are involved in this case. Hemant Hathi is their Chartered Accountant.
The brothers own a Gujarat-based Sandesara group company called Sterling Biotech Ltd which was founded in 1985. They own another company called Sterling Oil Exploration and Energy Production which was established in 2003 with its headquarters in Nigeria.
A Bench of Justices J.K. Maheshwari and Vijay Bishnoi allowed the writ petitions filed in 2020. The petition sought to end parallel actions by the CBI, ED, Serious Fraud Investigation Office (SFIO), IT Department, and proceedings under the Fugitive Economic Offenders Act, 2018.
The Sandesara brothers, whose business interests ranged from pharmaceuticals to energy, left India in 2017 using Albanian passports after being accused of defaulting on large sums of loans from domestic banks, according to court records.
Also Read: From private jets & starry parties to hiding in Nigeria: The giant fall of the Sandesaras
What they urged in court
Calling the proposed arrangement a “full and final settlement with the lender banks and investigating agencies,” the Supreme Court held that all proceedings would be quashed only upon the deposit of Rs 5,100 crore by 17 December. It stressed that the directions were issued in the “peculiar facts of this case” and “shall not be treated as precedent”.
In their writ petition, they had urged the top court to set aside the FIRs, charge sheets and all consequential proceedings arising from two CBI FIRs (dated 30 August, 2017 and 25 October, 2017) under the Prevention of Corruption Act and IPC sections for conspiracy, cheating and forgery.
They also sought setting aside CBI charge sheets linked to the above FIRs, two ED cases from 2017, and attachment/seizure proceedings related to the case. They also sought quashing of proceedings under the Fugitive Economic Offenders Act, their prosecution by the SFIO under Companies Act, 2013; and an Income Tax and Black Money Act prosecution complaints pending before the Additional Metropolitan Magistrate, Mumbai. The petitioners argued that the disputes were fundamentally commercial in nature, arising from defaults on substantial loans, and could be resolved through a comprehensive financial settlement.
Earlier court proceedings
The petition first came up before the SC in February 2020 in which they submitted that “banks are willing to close the issue and he has obtained One Time Settlement (OTS) from about fifteen out of twenty banks” and that they would repay further substantive amounts.
The court issued a notice to the CBI on the application.
By November 2021, their accused’s counsels submitted that “since the total amount stated to be due from (the brothers) is little over Rs 1,500 odd crore out of which Rupees 600 crore is alleged to have been repaid… the outstanding is little more than rupees 900 crore”.
They offered to make the payment within three months, which “could possibly bring all the disputes to an end”.
In January 2022, the court extended interim protection to the brothers after the government sought adjournment due to Covid. The court observed, “In view of the fact that the entire amount in respect of which charge sheet has been filed has been volunteered to be paid by the petitioners, we really see no reason why the money should not be received…”
It ordered that all proceedings remain in abeyance.
In February 2022, the Bench asked the government, represented by the additional solicitor general, “If the petitioner is willing to bring in Rs 900-odd crores, he (the ASG) may obtain instructions as to what concessions the State is willing to show.”
Three months later, the Supreme Court directed that “all proceedings arising from the predicate offence qua all investigating agencies be kept in abeyance,” continuing the January 2022 protection. Another four months later, in September 2022, the petitioners sought more time to make a statement on the remaining sums to be paid in court.
In March 2024, the petitioners informed the court that USD 50 million (approximately Rs 415 crore) had been transferred to a bank recovery account and another USD 50 million would follow within three days. They also stated that “another payment of USD 100 million will be made within a period of eight weeks”.
OTS figures, IBC recoveries
During the crucial hearing on 18 November 2025, the court recorded detailed financial figures, noting that while the FIR alleged Rs 5,383 crore, the one-time settlement amounted to Rs 3,826 crore for Indian companies and Rs 2,935 crore for foreign guarantor companies, bringing the total OTS to Rs 6,761 crore.
The deposits already made include a 10 percent OTS payment of Rs 614 crore and additional amounts, including court-directed deposits, totaling Rs 2,893.63 crore, bringing the overall deposits to ₹3,507.63 crore.
Lender banks independently recovered Rs 1,192 crore through Insolvency and Bankruptcy Code (IBC) proceedings before the National Company Law Tribunal (NCLT) involving Sterling Biotech Ltd, Sterling SEZ Ltd and PMT Machines Ltd.
After adjusting deposits and IBC recoveries, the court concluded that the remaining unpaid amount was Rs 2,061.37 crore.
Senior counsel Mukul Rohatgi, who represented the petitioners, argued that recoveries made in IBC could not be recovered again from the petitioners. Nonetheless, he stated that the petitioners were prepared for a complete settlement to end all criminal and civil proceedings.
At the November 18 hearing, Solicitor General Tushar Mehta, appearing with ASG S.V. Raju, submitted a sealed cover containing a higher settlement figure of Rs 5,100 crore. And the petitioners agreed with the amount. Rohatgi told the court his clients were ready to deposit “the entire amount of Rs. 5100 crores… to get rid of all proceedings and to put a quietus to the litigation of criminal cases with respect to CBI, ED, attachments under PMLA, Fugitive Act, SFIO, black money and Income Tax”.
The court observed, “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.”
Allowing the petition subject to full deposit, the Supreme Court ordered that Rs 5,100 crore must be deposited with the SC Registry on or before 17 December.
The deposits may be made in separate tranches and the amount will be placed in a short-term interest-bearing fixed deposit in a nationalised bank. Also, the Registrar (Judicial–Administration) will verify lender bank claims and disburse the amounts proportionately.
All proceedings will be quashed after the deposit, ordered the court.
(Edited by Ajeet Tiwari)
Also Read: How fugitive Sandesaras getting Sterling Biotech back at discount pokes holes in IBC process