On November 19, in a major relief to Sterling Biotech loan fraud accused Nitin and Chetan Sandesara, the Supreme Court allowed quashing of all FIRs against them if they deposited Rs 5,100 crore as a one-time settlement for their debt.
The Sandesara brothers, with other family members, are accused of defrauding banks to the tune of Rs 16,000 crore, a case being investigated by the ED. While the Bench of Justices J K Maheshwari and Vijay Bishnoi underlined the order could not be treated as precedent, ED sources said the agency is bracing for defence lawyers of other bank loan fraud accused using it to plead settling of cases against their clients — particularly as the apex court order underlined a position of law.
The ED’s list of loan fraud accused runs long and includes, prominently, Vijay Mallya, Nirav Modi, Mehul Choksi and Jatin Mehta, among others. Like the Sandesaras, they left the country just before loan fraud charges were registered against them.
The Sandesaras have been settled in Nigeria/ Albania since 2017; Mallya and Modi are in the UK; Choksi in Belgium, and Mehta in the UAE. “All the fugitives are actually ready to repay their debts,” a senior ED official said. “The top court said its Sandesara order is based on peculiar facts of the case and so cannot be used as a precedent. But defence lawyers will find a way.”
The Sandesara case
The CBI/ ED accused the Sandesaras of Sterling Biotech Group of massive bank loan fraud, money laundering and shell-company diversion, alleging a web of benami firms and fake transactions. In September 2020, they were declared Fugitive Economic Offenders for failure to cooperate with the law. (The Fugitive Economic Offenders Act of 2018 bars those declared so and the companies connected to them from filing or defending any civil claim in any court or tribunal.)
In its November 19 order, the Supreme Court brought to a close the criminal proceedings against the Sandesara Group promoters, holding that once defalcated public money is substantially brought back to banks, the continuation of criminal prosecution would serve no meaningful purpose. The Court added all proceedings against the Sandesaras under the CBI, ED, PMLA, Fugitive Economic Offenders Act, SFIO, Black Money Act and Income Tax laws stand quashed, subject to full payment of Rs 5,100 crore.
The Court mentioned the Sandesaras faced FIRs alleging defalcation of Rs 5,383 crore (with accrued interest and other charges, the ED put total fraud at over Rs 16,000 crore and seized assets worth Rs 14,521 crore). And noted, over time, the petitioners had entered into One Time Settlements with banks for Rs 3,826 crore for Indian companies, and Rs 2,935 crore for foreign guarantor companies, taking the total settlement figure to Rs 6,761 crore.
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Out of this, the Court said, the petitioners had deposited Rs 3,507.63 crore under various heads, including pursuant to interim legal directions. Separately, Rs 1,192 crore had been recovered through insolvency proceedings before the National Company Law Tribunal from Sterling Biotech, Sterling SEZ and PMT Machines. After adjusting these recoveries, the Court computed the residual liability at Rs 2,061.37 crore.
In the final hearing in the Supreme Court, the investigating agencies — represented by Solicitor General Tushar Mehta and Additional Solicitor General S V Raju — placed Rs 5,100 crore as the amount required to bring full closure to all criminal proceedings and bank dues.
Mehta said accepting anything less than what banks were entitled to would not be justified, and the Court recorded the Rs 5,100-crore figure represented the government’s final demand.
The Sandesaras are reported to be in Nigeria/ Albania for years. The extradition requests against them remain pending, and the Red Corner Notices are still active. After the Supreme Court ordered quashing of the FIRs, the government filed no objections.
The Other Fugitives
Vijay Mallya
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Case: Accused in 2015 of loan fraud and money-laundering linked to Kingfisher Airlines. A consortium of 17 banks led by the SBI is the complainant party, with both the CBI and ED filing cases. Mallya left for the UK on March 2, 2016.
Amount to be recovered: According to the case under Debt Recovery Tribunal, the total default by Mallya was of Rs 6,848 crore in 2013. With accrued interest over time, it stands at Rs 17,781 crore as of 2025.
Recovery/Attachment: According to the Finance Ministry Annual Report 2024-25, the ED has attached and restored to banks assets worth over Rs 14,000 crore in the case.
Status: Mallya was declared a Fugitive Economic Offender in 2019. UK courts ordered his extradition, but it awaits final UK government action. Mallya remains in the UK pending that.
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Mehul Choksi
Case: Co-accused with Nirav Modi in PNB loan fraud case. He structured supply-chain frauds via shell firms and siphoned funds abroad, and sold fake diamonds, agencies allege.
Default: His companies defaulted on loans of Rs 6,097 crore.
Recovery/Attachment: ED has attached assets of Rs 2,565 crore belonging to Choksi. The Finance Ministry said Rs 310 crore restored to the liquidator of Choksi’s firm. Restitution of other assets to banks is under process.
Status: Obtained citizenship of Antigua & Barbuda and left India in 2018. Earlier this year, he was arrested in Belgium.
Nirav Modi
Case: Prime accused in the Rs 13,000 crore PNB loan fraud, involving fraudulent Letters of Undertaking issued via PNB’s Brady House branch, Mumbai. ED, CBI allege conspiracy with bank officials to siphon funds abroad.
Default: Modi’s companies are accused of defaulting bank loans amounting to Rs 6,498 crore.
Recovery/Attachment: ED has attached Rs 2,626 assets belonging to Modi, including jewellery, properties and firms. The Ministry of Finance said Rs 1,052 crore worth of the attached assets have been restituted to the banks.
Status: Modi is a declared Fugitive Economic Offender. Arrested in the UK in 2019, he is fighting extradition with hearings continuing in UK courts. India is pursuing his return under its extradition treaty with the UK.
Jatin Mehta, Winsome Diamonds
Case: Accused in one of India’s biggest diamond-sector loan frauds, involving alleged circular trading and diversion of bullion-backed credit. Probes involve the ED, CBI, and banks.
Default: The Winsome Diamonds and Forever Precious Jewellery are accused of defaulting on loans amounting to Rs 6,800 crore in 2013. This ballooned to more than Rs 10,000 in subsequent years.
Recovery/Attachment: The ED has attached assets to the tune of around Rs 1,000 crore in the case. According to proceedings in a UK court, banks have been able to recover only Rs 157 crore.
Status: Left India in 2013 and obtained citizenship of Saint Kitts and Nevis, a Caribbean nation. Agencies have sought his return and issued notices, while Mehta has been declared a wilful defaulter by banks. Investigations in the cases continue.
