New Delhi, April 2 – The Supreme Court told the Securities and Exchange Board of India (SEBI) on Thursday to either close the proceedings against Sterling Biotech Limited (SBL) and its promoters, Chetan and Nitin Sandesara, or else it will be compelled to take a serious view of the matter.
A bench of Justices J K Maheshwari and A S Chandurkar told SEBI's counsel that the board's order from last November was very clear that all proceedings against the Sandesara brothers would be quashed if they deposited Rs 5,100 crore in the apex court registry.
"We have said that all proceedings, including those by SEBI, need to be quashed upon deposit of the money. If you are doing it, then it is alright, or we will be compelled to pass a detailed order on the issue," the bench told the counsel.
SEBI's counsel said Solicitor General Tushar Mehta is deliberating with SEBI and sought a week's time to inform the court about the developments.
Senior advocate Mukul Rohatgi, representing the Sandesara brothers, said SEBI has not yet closed the proceedings and must comply with the Supreme Court's order.
The bench posted the matter for further hearing on April 10 and noted that Mehta, who is in discussion with SEBI, will inform the court about the developments the day after the hearing.
SEBI is investigating allegations that the promoters of SBL had obtained loans from foreign banks and routed funds into the company as investments, misleading investors and distorting the company's true financial position.
On November 19 last year, the top court accepted a settlement proposal under which the Sandesara brothers agreed to deposit Rs 5,100 crore as a full and final settlement of claims arising from these proceedings.
The amount was deposited in the court registry in December 2025, after which the court implemented its earlier order to quash the proceedings.
Last month, a consortium of secured lenders, including banks of SBL's promoters Chetan and Nitin Sandesara, approached the top court seeking disbursement of their claim amounts from the Rs 5,100 crore deposited in the apex court registry, highlighting that their total outstanding against the group's companies was Rs 19,283.77 crore.
The banks, comprising 20 out of the 26 secured creditors of SBL, submitted a consolidated computation of claims across multiple group entities and outlined the methodology for distributing the amount.
However, the consortium's application stated that some lenders have not yet formally confirmed their acceptance, although their dues have been computed on the same basis.
On March 25, the bench noted that there are 26 banks in total and out of these 26 banks, serial numbers one to 20 have submitted their claims, and all relevant documents corresponding to their respective shares as specified in the chart.
It noted that six banks have not submitted the formal affidavit and required documents, including Krung Thai Bank Public Company Limited (Singapore), Hua Nan Commercial Bank (Singapore), Taiwan Co-operative Bank, The Shanghai Commercial and Savings Bank Limited, HDFC Bank, and Aviral Maritime Infra.
"Thus, retaining the share with respect to their claims, the amount of the banks at Serial Nos. 1 to 20 be released immediately in terms of column 5 of Annexure A-4," the bench had said, adding that the interest accrued on the deposits with these banks should also be distributed proportionately according to their share in the total claims.
It further said that the amount with respect to the banks at serial numbers 21 to 26, which is retained, shall be kept in fixed deposit on an auto-renewal basis separately and distributed on the submission of their claims.
"The interest accrued on the sum of the remaining six banks be also kept in fixed deposit, in addition to the amount of their proportionate share," it had said.
Regarding SEBI's proceedings against the Sandesara brothers, the top court on March 23 said Solicitor General may seek instructions on the issue and also on closing other issues.
The banks had earlier told the court that the lenders had decided to aggregate all domestic and foreign currency exposures, convert foreign loans into rupees at a fixed exchange rate of Rs 63 per US dollar – reflecting the average rate in 2015, when most accounts turned non-performing – and apply a uniform interest rate of 9 per cent per annum from the date of NPA, with annual rests.
The banks had further told the court that after applying this methodology, the total admitted dues across all accounts were computed at Rs 19,283.77 crore and the amount of Rs 5,100 crore deposited pursuant to the court's earlier order was proposed to be distributed proportionately based on each lender's share in the total dues.
The legal dispute arose from a batch of petitions filed by the Sandesara brothers seeking the quashing of multiple proceedings, including FIRs registered by the CBI, ED, and cases registered under the Fugitive Economic Offenders Act, Companies Act and Black Money Act.