SC quashes criminal cases against Sandesara brothers; agrees to ₹5,100 crore settlement in Sterling Biotech fraud

The Supreme Court has conditionally ordered the quashing of all criminal proceedings against the fugitive Sandesara brothers in the multi-crore Sterling Biotech bank fraud case. The relief is strictly contingent upon the brothers depositing ₹5,100 crore as a ‘full and final payment’ to the lender banks by December 17, 2025.

A Bench led by JK Maheshwari reasoned that if the public money is returned to the lenders via this one-time settlement (OTS), the continuation of criminal proceedings would be pointless.

Key financial details & conditions

• Settlement Amount: The Sandesara brothers must deposit ₹5,100 crore with the Supreme Court Registry by December 17, 2025. The money will be held in a short-term, interest-bearing fixed deposit and then disbursed to the lender banks proportionate to their dues.
• Original Alleged Defalcation: The initial FIR recorded the amount of defalcation as ₹5,383 crore.
• Total OTS Value: The proposed One-Time Settlement (OTS) for the Indian companies was ₹3,826 crore, and for the foreign guarantor companies, it was ₹2,935 crore, totaling ₹6,761 crore.
• Prior Payments: The court order noted that the petitioners had already deposited approximately ₹3,507.63 crore under various heads, leaving a remaining due of ₹3,253.37 crore against the original total OTS.
• Final Demand: The Solicitor General, representing the government and probe agencies, submitted a sealed-cover demand of ₹5,100 crore, which the brothers agreed to pay to secure their freedom from the criminal cases.

Background from insolvency proceedings (IBC, 2016)

The Sandesara Group’s companies, including Sterling Biotech Limited and its associates, have been undergoing insolvency proceedings under the Insolvency and Bankruptcy Code (IBC), 2016, at the National Company Law Tribunal (NCLT) and NCLAT.

• Lender Action: Lenders had initiated Corporate Insolvency Resolution Process (CIRP) proceedings, and as per the initial information, recoveries worth ₹1,192 crore had been made.
• Sterling Biotech’s Liquidation: The CIRP against Sterling Biotech Limited was admitted on June 11, 2018. As no resolution plan was approved, the NCLT ordered the company’s liquidation in October 2019.
• Acquisition as a Going Concern: Despite the liquidation, the company was ultimately sold as a going concern through an acquisition plan submitted by Perfect Day Inc., a US-based food technology company. The plan was approved by the NCLT on November 11, 2022. Perfect Day’s bid was for ₹638,00,00,005 (approx. ₹638 crore.
• Other Group Entities: Other group entities have also faced IBC action:
  • Sterling Healthcare Limited had a ₹12.80-crore resolution plan approved by the NCLT in November 2025, offering a recovery of nearly 75% to its financial creditors.
  • Sterling Oil Resources Limited was admitted into CIRP in May 2023 for defaulting on over ₹1,656 crore claimed by SBI.
  • Sterling SEZ and Infrastructure Limited was ordered for liquidation in October 2021 and was put up for auction.

The group’s total debt across its subsidiaries has been reported to exceed ₹15,000 crore. The Supreme Court’s conditional order reflects an emphasis on recovering public money through a substantial settlement, despite the ongoing parallel insolvency and criminal actions.

Also read: Fugitive bizman Nitin Sandesara’s Sterling SEZ goes to auction with reserve price of Rs 324 crore