Mint Explainer | Does SC relief for Sterling Biotech promoters open exit routes for fugitives like Mallya, Nirav Modi?
Mint looks at what the Supreme Court ordered and whether similar relief could be sought by high-profile criminals such as Vijay Mallya and Nirav Modi.
What the Supreme Court ordered
In its verdict dated November 19, a bench of justices JK Maheshwari and Vijay Bishnoi accepted a settlement offer submitted by the legal team of Sterling supporters and the investigating agencies represented by attorney general Tushar Mehta.
The court was hearing writ petitions filed by Nitin and Chetan Sandesara seeking to quash criminal and enforcement cases arising out of two FIRs by the central bureau of investigation (CBI) under the Black Money Act and the Fugitive Economic Offenders Act and related cases being pursued by the enforcement directorate (ED), serious fraud investigation office (SFIO) and income tax department.
The court stated that all these cases would be closed once Sandesaras deposited the money. ₹5,100 crore on the Supreme Court registry by December 17, 2025. The money will be deposited in a fixed deposit with short-term interest and will be distributed proportionately to banks after verification of dues.
The court stated that the decision was made due to the “strange facts” of this case and should not set a precedent.
But lawyers say the ruling still creates a practical opportunity for other fugitives to seek similar solutions.
What did the Sandesara brothers’ scam involve?
The Sandesara brothers founded the Sterling Group. ₹40,000 crore business covering pharma, machinery, SEZ and oil and gas. They expanded aggressively into Nigeria, where their companies, SEEPCO and Sterling Global Oil Resources, have become the country’s largest independent crude oil producers.
Indian investigating agencies allege that this growth was driven by a massive bank fraud involving forged documents, inflated financial statements and diversion of public sector bank loans to overseas ventures through a network of shell companies.
Over time, multiple CBI chargesheets, ED supplements, SFIO investigations and Income Tax cases were filed.
The brothers fled India in 2017, obtained Albanian passports and were declared fugitive economic criminals. Nigeria rejected India’s extradition request, describing the allegations as “political”.
Several companies of the Sterling Group subsequently collapsed through insolvency, leading to limited recoveries, after which the brothers appealed to the High Court seeking full closure through a financial settlement.
How does this compare to other major banking frauds?
The Sandesara case is part of a broader pattern of high-value banking frauds in India. Vijay Mallya is in debt ₹9,000 crore to Indian banks following the collapse of Kingfisher Airlines. He fled to England in 2016 and continues to fight extradition.
Nirav Modi and Mehul Choksi are accused ₹13,600 million Punjab National Bank (PNB) scam involving fake commitment letters. While Modi was appealing extradition in London, Choksi moved first to Antigua and then to Belgium.
India has also witnessed significant domestic frauds. ₹22,842 crore ABG Shipyard case and ₹The 34,000-crore DHFL scam is the biggest financial scandal uncovered by investigators.
Can other fugitives use this decision to find solutions?
While the Supreme Court has said the order should not be cited as a precedent, lawyers believe it opens a practical way for fugitives to test similar settlement strategies. It doesn’t automatically help Mallya, Nirav Modi or Choksi, but it does give their lawyers a new argument to present before the courts.
Legal experts warn that wealthy criminals may believe they can flee India, fight cases from abroad and then “solve” those cases by paying part of their dues. This undermines the deterrent effect of criminal prosecution and the Fugitive Economic Offenders Act.
Yatharth Rohila, advocate and partner at law firm Aeddhaas Legal LLP, said the ruling “clearly opens the door (at least in theory) for other fugitive economic criminals, particularly those with significant overseas assets, to negotiate financial settlements rather than full-blown criminal prosecutions” and could argue that repayment could justify closure.
Alay Razvi, managing partner of law firm Accord Juris, warned that such settlements would require strict conditions: repayment must clearly serve the public interest better than prosecution, and both banks and the government must support the proposal.
“There is a possibility that criminals may speculate that repayment could substitute for imprisonment, potentially weakening deterrence,” Razvi warned. He also noted that fugitives may attempt to use the decision in their extradition fight, “even though extradition law still requires physical presence or official assurance.”
What does the decision mean for public sector banks?
The decision comes at a time when public sector banks are heavily exposed to fraud.
Reserve Bank of India (RBI) annual report for 2024-25 showed losses rising sharply ₹12,230 crore in 2023-24 ₹36,014 crore in 2024-25, PSU banks accounting for over 70% of the total. In this context, the agreement presents banks with both opportunities and challenges.
Gauhar Mirza, partner at law firm Saraf & Partners, said the verdict could help banks recover huge amounts trapped in the case. “This could help banks recover significant sums trapped in lengthy transactions. OTS (one-time payment) programs and applicable laws,” he said.
Supreme Court lawyer Tushar Kumar said: “The judgment reinforces that the courts are open to practical, results-oriented decisions that yield significant public funds. It strengthens rather than weakens the negotiating position of banks.”
But experts warn that too many settlements could undermine public trust. Rohila stated that criminals may assume that they can avoid accountability by fleeing abroad and negotiating, which could weaken the deterrent value of the system.
What does the decision mean for enforcement agencies?
In the Sandesara brothers’ case, the Supreme Court directed the CBI, ED, SFIO and the tax department to close all investigations after payment.
Lawyers point out that regardless of the outcome of the case, their legal powers do not change, but the decision changes the practical environment in which institutions operate.
Tushar Agarwal is the founder of law firm C.LIA.P. Juris, Advocates & Solicitors said: “Agency like CBI, ED, SFIO and Income Tax Department will see this decision as both a warning signal and a policy signal.”
Agarwal said the deterrent effect of criminal prosecution could be weakened if criminals believe that large repayments can give them relief. This could encourage more offenders to file settlement-based petitions, but courts will likely continue to consider such requests on an exceptional basis, he added.
For now, the Sandesara case remains a rare exception. The bigger question is whether it will stay that way.
