Supreme Court let off Sandesaras with Rs 5,100-cr deposit, banks say dues Rs 19,000 cr

The application was jointly filed by the secured lender banks seeking directions for disbursal of their respective share, from the Rs 5,100 crore deposited by the group with the Supreme Court Registry in compliance with the November 19 order.

The application said the banks had devised a formula to apportion the dues. It said the “process and methodology of distribution and the respective share of each Secured Lender Bank has been arrived at with the consensus of the Secured Lenders”.

Five foreign entities with total outstanding dues of Rs 463.12 crore will receive Rs 120.8 crore.

On March 16, a Supreme Court bench of Justices J K Maheswari and A S Chandurkar heard the bank’s application. During the hearing, the counsel for the Sandesaras submitted that SEBI proceedings against the company were continuing despite the Supreme Court order. The bench inquired why SEBI was coming in the way after its order. The court will hear the matter again on March 23.

The Sandesara brothers had approached the court in 2020, seeking quashing of cases filed by the CBI and Enforcement Directorate over defaulting of repayment to the banks. They said they had already entered into a one-time settlement (OTS) of Rs 6,761 crore with the consortium of banks regarding the outstanding amount of both Indian and foreign entities.

They submitted theirs “is not a case of a person who has duped the banks of money. Genuine business losses were incurred in ordinary course of business, and the Petitioner has made all reasonable efforts to repay the same”.

During the course of the hearing, the petitioners also said they had deposited Rs 3,507.63 crore of the OTS amount under various heads while another Rs 1,192 crore was recovered by the banks via proceedings under the Insolvency and Bankruptcy Code (IBC), 2016, leaving them with an outstanding liability of Rs 2,061.37 crore. They pointed out that the ED had also attached assets worth Rs 27,757 crore. The group expressed its willingness to pay the remaining amount and settle the issue.

The agencies, however, opposed the amount proposed and, after consultation with the banks, submitted a revised figure of Rs 5,100 crore which was accepted by the group.

On November 19, the Supreme Court allowed the request to quash the proceedings on payment of Rs 5,100 crore. It said the “quashing would be operative on deposit of Rs 5,100 crore as a full and final payment based on consensus, on or before 17.12.2025”. The Rs 5,100 crore ordered to be paid was besides the Rs 3,507.63 crore already deposited, and Rs 1,192 crore recovered through IBC proceedings.

The CBI/ED had accused the Sandesaras of bank loan fraud, money laundering and shell-company diversion, alleging a web of benami firms and fake transactions. The Sandesaras are reported to be in Nigeria/Albania. The extradition requests against them remain pending, and Red Corner Notices against them are still active.