The Supreme Court has passed an order that has sent ripples of disbelief among various legal experts, triggered a sharp tweet from Prashant Bhushan, and offered a glimmer of hope and relief to economic offenders and fugitives. A two-judge bench comprising Justices J.K. Maheshwari and Vijay Bishnoi has agreed to quash all criminal proceedings against fugitive promoters Nitin and Chetan Sandesara if they pay ₹5,100 crore by the stipulated deadline of 17 December, 2025.
Reacting to the order, Bhushan posted on X that “India’s top court agrees to $570 million settlement by fugitive billionaire brothers… Wow! New law for them, the wealthy frauds,” noting that the Apex Court had agreed to drop criminal charges if they paid roughly a third of their dues in a $1.6-billion bank fraud. That pithy summary captured, in one angry breath, the unease many feel about the judgment.
By accepting the proposal, the Supreme Court has done something genuinely unprecedented: it has allowed two declared fugitive economic offenders to, in effect, buy complete legal peace if they pay up. The bench has taken pains to say that this order is confined to the “peculiar facts” of the case and “shall not be treated as a precedent”. Yet it must be said that, in a legal system built on consistency and equality before law, it will be difficult for similarly placed accused—or other Benches of the Court—to pretend that this judgment does not exist.
Who are the Sandesara brothers and what were they accused of?
The Sandesara brothers were promoters of Sterling Biotech, once a major pharmaceutical and gelatin manufacturer. Over time, their group companies came under the scanner for allegedly defrauding a consortium of banks of thousands of crores through falsified accounts, inflated turnover, benami entities and diversion of loan funds. What began as a bank fraud case of around ₹5,383 crore soon ballooned into an alleged exposure in the range of ₹14,000–16,000 crore when the entire group structure and multiple credit facilities were mapped.
The Central Bureau of Investigation, Enforcement Directorate, Serious Fraud Investigation Office, Income Tax Department and other agencies all moved in. The brothers, meanwhile, left India, acquired foreign passports and continued operating a highly successful oil business in Nigeria. Eventually, they were declared fugitive economic offenders under a law that was specifically brought in to deal with high-profile absconders.
From bank fraud to fugitive status: the long legal saga
The story did not move in a straight line. On the insolvency side, Sterling Biotech first went into corporate insolvency, then its absconding promoters controversially offered a one-time settlement which lenders approved, only for the National Company Law Tribunal to reject the withdrawal and order liquidation. The National Company Law Appellate Tribunal later allowed withdrawal under Section 12A of the Insolvency and Bankruptcy Code, subject to conditions and full payment, but that attempt ultimately collapsed when the promised funds did not materialise within time.
In parallel, criminal and money-laundering cases progressed. Properties worth several thousand crores were attached, the brothers were declared fugitive economic offenders, and extradition efforts from foreign jurisdictions went nowhere. Even as they flourished abroad, Indian agencies publicly insisted they would not “negotiate” with such offenders. Yet, over the years, before the Supreme Court, the narrative steadily shifted from pure prosecution to a hybrid space where repayment and settlement kept creeping into the conversation.
The ₹5,100 crore deal: what lies behind the number
On paper, the settlement figure of ₹5,100 crore looks impressive. It is close to the original CBI FIR figure and significantly higher than the earlier one-time settlement amounts. The Court has also recorded that substantial sums have already been deposited or recovered: tranches paid under earlier orders, money realised through the insolvency process, and amounts now promised under the final settlement.
However, critics argue that the real question is not the headline number, but the comparison with the overall alleged exposure and the timing. If one takes the higher consolidated figure of group-wide fraud, the recovery still represents only a fraction of what is said to have been lost. Moreover, the payment is being made after years of delay during which the accused lived comfortably abroad, ran profitable businesses and resisted extradition. In effect, the system appears to be rewarding those who stalled longest and negotiated hardest.
‘No precedent’ – can the Court really say that?
Perhaps the most controversial line in the judgment is the caveat that the directions are confined to the “peculiar facts” of the case and “shall not be treated as a precedent”. Courts often use such language to ring-fence extraordinary relief. But in a constitutional system governed by Article 14, like cases are expected to be treated alike.
If a future fugitive economic offender offers to pay a large amount to settle, what is a High Court—or even another Bench of the Supreme Court—supposed to do? The Sandesara order will stare them in the face. Any rejection will invite the argument that the State is discriminating between similarly placed offenders. Any acceptance will deepen the sense that criminal liability in India is negotiable for those with sufficient resources.
In practice, therefore, the “no precedent” disclaimer may be more a pious hope than a workable legal shield. Once a door has been opened, it is very hard to convince others that it is still locked.
Other economic offenders watching closely
This is why the order will inevitably be read against the backdrop of other marquee economic offender cases. Vijay Mallya continues to resist extradition from the United Kingdom even after being declared a fugitive economic offender, while Nirav Modi remains in a London prison as confidential proceedings delay his handover to India. Mehul Choksi, now arrested in Belgium in connection with the Punjab National Bank fraud, is fighting both his extradition and attempts to have him formally branded a fugitive offender. Unlike the Sandesara brothers, none of them has secured a Supreme Court-brokered deal that trades full criminal prosecution for a large lump-sum payment to banks. The contrast is too stark to ignore, and it is hard to imagine their lawyers not using the Sandesara template as a rhetorical, if not legal, benchmark.
A glimmer of hope for economic offenders – and a chill for equality before law
It is easy to see why this decision will be read as a moment of hope by other economic offenders and fugitives. If two individuals who were not only accused of massive fraud but also formally branded as fugitive economic offenders can secure a clean slate by paying part of the alleged dues, why should others not explore similar routes?
For ordinary citizens and small borrowers, the optics are devastating. People have lost homes, land and liberty over far smaller defaults. Farmers and small entrepreneurs have faced coercive recovery, auctions and criminal cases without the luxury of negotiating a bespoke settlement at the Supreme Court. The contrast feeds a long-standing perception that there is one kind of law for the powerful and another for everyone else.
Why the Bhopal gas settlement is a very different story
Some might be tempted to compare the Sandesara settlement with the Union Carbide deal in the Bhopal gas tragedy, where the Supreme Court in 1989 recorded an overall settlement of claims for US$470 million and, at that time, also terminated all civil and criminal proceedings arising from the disaster. On the surface, both situations involve the apex court using its extraordinary powers to broker a global compromise in return for a hefty payment.
Yet the subsequent judicial history of Bhopal underlines precisely why the present order is so controversial. In 1991, faced with sustained criticism, the Supreme Court reviewed its earlier orders: while it allowed the US$470 million compensation package to stand, it restored the criminal prosecutions against Union Carbide, its officials and associated entities. In other words, the Court eventually accepted that monetary settlement and criminal accountability could not be fused into a single, all-purpose discharge. In the Sandesara case, by contrast, payment of money is being consciously tied to complete criminal closure—without the corrective second thoughts that Bhopal ultimately produced.
Recovery versus rule of law: what should come first?
Defenders of the judgment will argue that the Court has acted pragmatically. Public sector banks are under stress, non-performing assets remain a chronic problem, and the chances of ever fully recovering money from fugitives based abroad are slim. If a deal brings back thousands of crores to the banking system, why cling mechanically to criminal proceedings that may drag on for decades with little practical benefit?
The counter-argument is that criminal law is not only about money. It is also about moral condemnation, deterrence, and signalling that certain conduct is beyond the pale. If large-scale financial fraud can be washed away through a cheque at the final stage, the incentive structure changes. Potential offenders may conclude that the worst-case scenario is not jail, but a negotiated payout many years later, after they have enjoyed the proceeds and built assets abroad. That is a dangerous message for a country trying to strengthen its financial integrity and global reputation.
What this means for the Fugitive Economic Offenders Act and beyond
The Fugitive Economic Offenders Act was marketed as a robust weapon against those who flee India to escape the law. It allows for comprehensive confiscation of assets and aims to ensure that absconding does not pay. The Sandesara settlement, however, suggests that even after a person is declared a fugitive economic offender, there is still space—at least in rare cases—for a judicially blessed bargain that wipes the slate clean.
This raises uncomfortable questions. Is the Act now a bargaining chip rather than a hard deterrent? Will agencies be tempted to quietly support settlements in big-ticket cases, while continuing to take a harsher line with smaller defaulters who lack bargaining power? And what role should Parliament play in clarifying whether such outcomes are in line with legislative intent?
Conclusion: an order that will haunt future courts?
The Supreme Court’s order in the Sandesara brothers’ case is, in many ways, a watershed. It prioritises financial recovery over the full pursuit of criminal accountability and does so in favour of individuals who had, for years, stayed beyond the reach of Indian law.
Even if the Court insists that its directions are confined to this one case, the legal and moral questions it has unleashed will not be so easily quarantined. Other fugitives will test the boundaries of this new possibility; lower courts will struggle to reconcile equality before law with the “peculiar facts” logic; and public confidence in the fairness of the system will be tested.
In the months ahead, the real legacy of this judgment will not be measured only in crores recovered, but in whether India’s justice system can still convincingly say that flight from the law and massive financial fraud are not, ultimately, negotiable offences.
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