SC's Sterling ruling may pave way for similar settlements

‘The Supreme Court’s decision to drop criminal cases against Sterling Biotech’s former directors Nitin and Chetan Sandesara after a part-payment of their dues could prompt other high-profile economic offenders to seek similar settlements, legal experts said.

- BHAVINI MISHRA

‘Though the apex court has clarified that its order is confined to the “peculiar facts” of the case, some lawyers believe it sets a powerful example that others like Vijay Mallya, Nirav Modi, and Mehul Choksi may attempt to invoke in their own defence.

“The Supreme Court has exercised its extraordinary powers to allow a onetime settlement that could exonerate accused ‘fugitive economic offenders’ from both criminal prosecution and civil liabilities, conditional on a massive payment to lenders,” said B Shravanth Shanker, advocate-on-record in the Supreme Court.

On Friday, a bench of Justice JK Maheshwari and Justice Vijay Bishnoi allowed the closure of all criminal and investigative proceedings against the Sandesara brothers, provided they deposit 5,100 crore by December 17, which is roughly one-third of their total dues. The amount will be distributed among a consortium of lender banks as a full and final settlement of the loans due, the court said.

“This move is an exception, not the norm, and is possible only because of the court’s discretionary authority under Article 142 (power to pass any order to do complete justice),” he said.

Other experts, however, believe that despite the bench’s clear direction that the order should not be treated as a precedent, the practical effect could be otherwise.