SC agrees to clear Sandesara brothers of bank fraud in ₹5,100-crore settlement

The Supreme Court has agreed to drop all criminal proceedings against fugitive businessmen Nitin and Chetan Sandesara, promoters of Sterling Biotech Ltd and Sterling SEZ & Infrastructure Ltd, for a ₹5,100-crore settlement in a bank fraud case.

The billionaire brothers, who built a small tea-trading business into a diversified conglomerate, fled the country in 2017 after being accused of defrauding Indian banks of more than $1.7 billion. They were later included in the list of 14 fugitive economic offenders in 2018, along with Kingfisher Airlines' founder, Vijay Mallya, and diamantaires Nirav Modi and Mehul Choksi.

A bench of Justices J.K. Maheshwari and Vijay Bishnoi approved the settlement in a 19 November order, seen by Mint, after solicitor general Tushar Mehta, appearing for the Union government and all investigating agencies, informed that the lenders had agreed to accept the amount as a complete settlement of all liabilities.

“In furtherance… the proposal made by the learned solicitor general has been accepted and the petitioners have agreed to deposit the amount specified in the proposal subject to closure of all the proceedings,” the order said.

The settlement involves the quashing of all cases filed against the brothers by the Central Bureau of Investigation (CBI), Directorate of Enforcement, Serious Fraud Investigation Office, income tax department, and proceedings under the Prevention of Money Laundering Act, Black Money Act, and the Fugitive Economic Offenders Act.

The amount must be deposited with the Supreme Court registry on or before 17 December 2025, which will place the funds in a short-term interest-bearing fixed deposit and release them proportionately to banks after verifying their dues.

The bench, however, made it clear that the relief was granted due to the peculiar facts of this case and should not operate as a precedent.

However, according to lawyers, the settlement creates a potential legal pathway for similar arrangements in large financial fraud cases, and high-profile fugitives like Vijay Mallya and Nirav Modi may attempt to use it as leverage.

“Not guaranteed, but quite plausible that their legal teams will explore similar settlement routes, especially now. Whether they succeed depends heavily on negotiation leverage—how much assets they can muster—how aggressive the banks and the state are in pushing for maximum recovery, and how the court views the balance between public interest (recovering money) and holding accountable serious economic offenders,” said Tushar Agarwal, founder and managing partner, law firm C.L.A.P. Juris.

He added that before the Sandesara ruling, the country had not seen a case where a financial settlement was accepted in a fraud involving such large public money. While FIRs are sometimes quashed after settlements in private commercial disputes, courts have traditionally refused such settlements in matters involving public funds, state-owned banks, or investigations by central agencies like the CBI and the ED.

Facts of the matter

The brothers informed the court in February 2024 that $50 million, about ₹415 crore, had already been deposited in the bank recovery account, according to the order details. They said another $50 million would be deposited within three days, and a further $100 million within eight weeks.

When the case was heard on 18 November 2025, the court reviewed the financial record. It noted that the alleged defalcation in the FIR was ₹5,383 crore, and the one-time settlement amount was ₹6,761 crore. This included Indian companies such as Sterling Biotech, Sterling SEZ and PMT Machines, as well as foreign guarantor entities including Sterling Port Ltd (SPL) and Sterling Oil Resources Ltd (SORL).

Of the ₹6,761 crore, the brothers had already paid ₹3,507.63 crore, leaving ₹3,253.37 crore outstanding. Banks had also recovered ₹1,192 crore through insolvency proceedings involving the Indian companies, bringing the remaining dues down to ₹2,061.37 crore.

After consultations with lenders and agencies, Mehta told the court that the final amount needed to close all cases was ₹5,100 crore.

Senior advocate Mukul Rohatgi, appearing for the Sandesara brothers, said they were willing to pay the full amount. The bench initially requested an ad hoc deposit of ₹2,062 crore and subsequently approved the entire settlement on 19 November.

A WhatsApp request sent to Rohatgi for comment remained unanswered until publication. A separate emailed request to Mamta Binani, the liquidator of Sterling Biotech Ltd, also remained unanswered until publication.

The brothers' rise and fall

The Sandesara brothers built the Sterling Group from a small tea-trading business into a diversified conglomerate with interests in pharmaceuticals, infrastructure, healthcare, engineering, and oil and gas. By the early 2010s, the group claimed a valuation of nearly $7 billion, and Sterling Biotech had become a major global producer of pharmaceutical-grade gelatin.

Alongside their Indian operations, they expanded aggressively in Nigeria nearly two decades ago. Through Sterling Oil Exploration and Production Co. Ltd (SEEPCO) and Sterling Global Oil Resources Ltd, they built what became the South African country's largest independent oil producer. At one point, their operations contributed over 2% of Nigeria’s government revenue, according to a Bloomberg report.

In India, however, investigators accused them of running a large bank fraud involving fabricated documents, shell entities, and the diversion of loan funds. After ED attachments and several charge sheets, the brothers fled India in 2017, on Albanian passports.

Several Indian companies in the group collapsed into insolvency. Sterling Biotech was sold by the Indian bankruptcy court to US-based Perfect Day Inc. in 2019, while Sterling SEZ and other units went into liquidation. Indian banks also secured UK court orders directing Sandesara-linked entities to pay nearly $60 million.