SC accepts Rs 5,100 crore settlement offer by Sterling Biotech in bank fraud case

“The writ petitions filed by the petitioners are allowed directing quashing of the proceedings…The said quashing would be operative on deposit of Rs 5,100 crores as a full and final payment based on consensus, on or before 17.12.2025,” the bench said in its November 24 order while allowing the petitions filed by Hemant S, Hathi and Chetan Jayantilal in 2020.

This is besides the Rs 3,507.63 crore already deposited by them and Rs 1,192 crore recovered by the banks by way of proceedings under the Insolvency Bankruptcy Code (IBC), 2016.

“The said amount be deposited before the Registry of this Court on or before the date as specified…permitting the petitioners to make the deposits in separate tranches and dates. On receiving the amount, it shall be kept in a short time interest bearing fixed deposit account in any nationalised bank till its disbursement…Upon submitting the claims, the deposited amount shall be disbursed to the respective lender banks on proportionate basis in reference to the amount due towards them,” the order said.

The bench said that when the deposit is made, “the litigation with respect to the loan amount of the petitioners for which the FIR was registered and the OTS (One Time Settlement) was sanctioned and approved, shall be put to an end by way of full and final settlement as per consensus and this litigation shall be put to quietus”, clarifying that “these directions as issued are in peculiar facts of this case, therefore, they shall not be treated as precedent”.

The court said that the FIR indicated that the amount of defalcation was Rs 5,383 crore. “The OTS with respect to all Indian companies of the petitioners with the banks was for a sum of Rs 3,826 crore and for foreign companies being guarantor was of Rs 2,935 crore, bringing the total sum to Rs 6,761 crore” of which they had already voluntarily deposited around Rs 3,507.63 crore, leaving the remaining dues to Rs 3,253.37 crore. The lender banks, too, recovered Rs 1,192 crore under IBC.

“However, out of the total amount as specified in the OTS, which was higher than the amount as specified in the FIR, the remaining unpaid amount comes to Rs 2,061.37 crore,” it noted.

The court pointed out that “after consultation with the lending banks, the investigating agencies through Solicitor General, in a sealed cover demanded Rs 5,100 crore against the dues/recoveries which are the subject matter of the FIR and other criminal proceedings”.

It said: “The petitioners intend to put quietus of the litigation with respect to CBI, ED, attachments under PMLA, Fugitive Act, SFIO, pertaining to black money and Income Tax, and have agreed to deposit the amount as demanded, honouring the proposal made by learned Solicitor General on behalf of the Government. The petitioners have agreed to deposit the said amount by way of full and final payment of the lender banks and to quash/close all proceedings against them.”

Allowing relief, the court noted that from “perusal of the orders passed in the proceedings of this case” earlier, “it is apparent that since inception, this Court was of the view that if the petitioners are ready to deposit the amount as settled in OTS and public money comes back to lender banks, the continuation of the criminal proceedings would not serve any useful purpose. The tenor of the proceedings apparently indicate peculiarity, with intent to protect the public money and interest and to get deposited the defalcated amount. In furtherance, the consensus has been arrived at as indicated above. In this view, in the peculiar facts and situation of the present case, discretion as prayed, deserves to be exercised for granting the relief, as prayed and to direct for quashment of all the proceedings.”