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Informist, Tuesday, Mar. 24, 2026

 

NEW DELHI – The Supreme Court has directed its registry to release INR 51 billion deposited by former directors of Sterling Biotech Ltd. and brothers Nitin Sandesara and Chetan Sandesara to banks on a proportionate basis in one week. However, any claim made by unsecured creditors don't have to be entertained by the registry, the court said.

 

The top court was hearing an application by State Bank of India and other secured lenders of Sterling Biotech and its group companies seeking directions for disbursal of their respective claim amounts, which stood deposited with the court's registry by the brothers. The apex court will hear the case on Sterling Biotech brothers next on Apr. 2.

 

The court also sought the Securities and Exchange Board of India's reply on the issue of the latter's probe against the brothers. SEBI's probe pertains to allegations that the brothers secured loans from foreign banks and routed the funds into their company as purported investments, which were projected in a manner that could mislead investors.

 

On Mar. 16, the Supreme Court had questioned SEBI for coming in the way of closing the proceedings against former directors of Sterling Biotech even after the court ordered quashing of all cases against them. Once the court has quashed all the cases and the payments made by the Sandesara brothers, all the proceedings were required to go, the apex court said.

 

Last year, the Supreme Court had agreed to drop criminal proceedings against the brothers, subject to them depositing INR 51 billion, one-third of the dues they owed in a bank fraud case. The apex court had noted that the brothers intended to end the litigation with respect to the Central Bureau of Investigation, Enforcement Directorate, attachments under Prevention of Money Laundering Act, Fugitive Act, Serious Fraud Investigation Office, pertaining to black money and income tax, and have agreed to deposit the amount as demanded, honouring the proposal made by Solicitor General of India Tushar Mehta, on behalf of the government. The petitioners have agreed to deposit the amount by way of full and final payment of the lender banks and to quash and close all proceedings against them, the court noted.

 

The Central Bureau of Investigation had registered a case against Sterling Biotech and its directors for cheating public sector banks. The probe agency said Sterling Biotech took a loan from a consortium of banks led by Andhra Bank, defaulted on its repayment, and it subsequently turned into a non-performing asset. The CBI alleged that the company diverted the loan amount to the entities abroad through its group companies by adopting a circuitous route. Thereafter, all other agencies like the Enforcement Directorate and Serious Fraud Investigation Office registered cases against the company and its directors.

 

In 2017, the brothers left India and obtained Albanian passports. Thereafter, Indian authorities designated them as "fugitive economic offenders". 

 

At 1447, shares of State Bank of India were down 0.8% at INR 1,023.50 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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