Inventiva Already Warned: Once Sandesara Walk Free After Part-Payment, Every Billionaire Fraudster Will Ask So, Anil Ambani Just Proved Us Right!

There is a scene in Indian courtroom proceedings that most people outside the legal establishment never get to witness. It happens in sealed covers. A government lawyer, in this case, the Solicitor General of India, walks to a bench of Supreme Court justices and hands over a document that nobody else in the room is permitted to read. The document contains a number. The number, once accepted by the court, ends a case that began in 2017, involves accusations of one of India’s largest ever bank frauds, and had consumed the resources of the CBI, the Enforcement Directorate, the SFIO, the Income Tax Department, and the Fugitive Economic Offenders proceedings for nearly a decade.

The number was ₹5,100 crore. The accused were Nitin and Chetan Sandesara, founders of Sterling Biotech, who had fled India in 2017 on Albanian passports. The OTS allowed was ₹5,100 crore, while the group was facing bank dues of more than ₹19,000 crore, and the ED had attached assets worth ₹13,000 crore. The Supreme Court accepted the number. It quashed the cases against Chetan Jayantilal Sandesara and Nitin Sandesara after they deposited ₹5,111 crore, with the deposits made between December 3 and December 6 in the registry of the Supreme Court.

The settlement was presented to the public as a triumph of pragmatism. Fugitives in Nigeria, no extradition treaty, assets scattered across continents, take the money and call it done. And then, within months, a man sitting in India, a man who has given the Supreme Court an undertaking that he will not leave the country, looked at that sealed-cover number and saw not the resolution of a decade-long saga but something far more useful: a template to get freedom. That man was Anil Ambani.

I. What the Sandesara Case Actually Was — And What India Was Owed

To understand the full implications of what happened in November 2025, you need to understand what the Sandesara case was, how large it truly was, and what the settlement actually recovered.

The Sandesara Group’s flagship, Sterling Biotech, was a Gujarat-based pharmaceutical and energy conglomerate founded in 1985. At its peak, the group had diversified into oil exploration in Nigeria through Sterling Oil Exploration and Energy Production Company. The brothers own another company called Sterling Oil Exploration and Energy Production which was established in 2003, headquartered in Nigeria, and their Nigerian company says on its website that it contributes 2.5% of Nigeria’s federal revenue.

The fraud allegations involved the systematic misappropriation of loans extended by a consortium of public sector banks, led by Andhra Bank, UCO Bank, State Bank of India, Allahabad Bank, and Bank of India. The Sandesara Group’s companies secured substantial loans from this consortium, and over time, investigators alleged, these funds were diverted through shell companies, fictitious transactions, and related-party dealings.

In 2017, when the heat became unbearable, the brothers left India. The CBI registered corruption and cheating cases. The ED began money laundering investigations. Their assets were attached. They were declared fugitive economic offenders. Interpol Red Corner Notices were issued. Nigeria was approached for extradition. Nigeria declined New Delhi’s request for their extradition, saying the Indian allegations “appeared to be political in nature.”

For eight years, the case went nowhere that mattered. The brothers remained in Nigeria and ran their oil company. India’s investigating agencies accumulated paperwork. Courts heard endless adjournments. And then, in a crucial hearing on November 18, 2025, the numbers were finally laid on the table. The Court noted that the alleged misappropriation in the FIR was ₹5,383 crore, and the one-time settlement amount, including amounts already recovered, was ₹6,761 crore.

This is where the arithmetic becomes morally consequential. According to estimates ‘using standard banking interest rates over eleven years’, the total amount owed by the Sandesaras could exceed ₹21,891 crore. If they paid ₹5,100 crore, and had already deposited another ₹3,507 crore in earlier legal proceedings, the total recovery amounts to only about 44.8 per cent of what they truly owe. That is a write-off of nearly ₹12,000 crore. Even more troubling, the ₹14,500 crore in seized assets, such as Nigerian oil operations, are not being liquidated to repay dues. If the Sandesaras pay ₹5,100 crore and get their assets back, they have not only avoided jail but may walk away with a net gain of ₹9,400 crore.

Read that last sentence again. The men accused of defrauding Indian public sector banks, whose depositors are Indians, whose losses are ultimately socialised onto the taxpayer, may have walked away from the settlement financially better off than when they entered it. In simpler terms: They win, the system loses.

II. What the Court Said — And What It Actually Did

The Supreme Court bench of Justices J.K. Maheshwari and Vijay Bishnoi was careful to build a protective wall around the Sandesara order. The bench had, from early stages, been inclined towards permitting an arrangement that secured the recovery of public money, observing: “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 one-time settlement (OTS) and public money comes back to lender banks, the continuation of the criminal proceedings would not serve any useful purpose.”

The court explicitly stated that the order was based on the “peculiar facts of this case” and clarified that the relief granted is confined to the specific facts of the Sandesara case and cannot be used as a precedent in future cases. Would it be wrong if we say this is the judicial equivalent of leaving a fire burning in a haystack and writing a note on it saying: “This fire is unique to these specific conditions. Do not use as a template for future fires.”?

While the Supreme Court explicitly clarified that its directions were based on the “peculiar facts of this case” and shall not be treated as a precedent, it has created a powerful institutional signal that economic criminals with the financial capacity to make a significant repayment can negotiate a “cash-for-freedom” deal at the highest judicial level.

The internal contradiction in the court’s position was noticed almost immediately, and from an unexpected source. A different bench of the Supreme Court, comprising Justice Vikram Nath and Justice Sandeep Mehta, subsequently reiterated a settled principle that economic offences not only defraud banks but also impact society at large, holding that a one-time settlement cannot erase criminal liability for fraud, forgery, or corruption. In other words, one bench of the Supreme Court quashed criminal cases on the basis of an OTS while another bench of the Supreme Court, three weeks later, said that OTS cannot erase criminal liability. The Supreme Court was, effectively, disagreeing with itself.

“The judgment makes it clear that it would not be made a precedent, which is a good thing, but it sets a foundation that economic fugitives could pay up the amount owed to the banks and walk free,” an ED official said. Another official said the development could incentivise fraudsters first to flee the country and then negotiate with financial institutions and investigative agencies.

This is the enforcement agency’s own assessment, on the record, of what their country’s highest court had just done. Not a commentator’s opinion. Not an opposition politician’s soundbite. The ED itself — the agency that spent years attaching the Sandesaras’ assets — said, in plain language, that the settlement could teach future fraudsters to flee first and negotiate later.

III. The Process Behind the Sealed Cover — And Why It Should Worry You

The Solicitor General, representing the Government and the investigating agencies, submitted the final proposal of ₹5,100 crore in a sealed cover — a figure the Sandesaras then accepted. The Supreme Court order immediately raises the question: why must the Sandesara matter be brought under the category of “peculiar facts” — to be not treated as a precedent for other fugitive economic offenders of nearly equal magnitude?

The sealed-cover mechanism, originally designed to protect sensitive national security information from public disclosure, has been increasingly used in India’s Supreme Court proceedings to present financial settlements in high-profile economic offence cases without public scrutiny. The number that ended the Sandesara case — ₹5,100 crore, a figure that wrote off perhaps ₹12,000 crore in dues — was never subjected to open court argument. Neither lenders representing the public interest nor civil society organisations challenging the settlement had any opportunity to contest the adequacy of the number. It was presented, accepted, and announced.

A question arises regarding the existence of back-channel negotiations before the matter formally reached the Supreme Court for settlement. Consequently, the quashing of the proceedings against the brothers automatically shields their alleged co-conspirators and facilitators, who were also under investigation. This is more so when the Sandesara case has been connected to several politicians, bureaucrats, and other influential people, leading to a political controversy that ran parallel to the financial fraud investigations.

The co-conspirator angle is one that received almost no coverage in the mainstream reporting of the settlement. When all criminal proceedings are quashed against the principal accused, the evidentiary basis for any prosecution of facilitators — bank officers who may have colluded, bureaucrats who may have intervened, politicians who may have provided cover — effectively collapses. The sealed-cover settlement did not just set the Sandesaras free. It may have insulated an entire ecosystem of alleged complicity from judicial examination.

IV. Inventiva’s Warning: What the Media Saw Coming

The publication Inventiva had written about the Sandesara settlement in terms that, in retrospect, read less like journalism and more like prophecy. In its analysis of the Supreme Court’s agreement to clear the Sandesaras, Inventiva had argued that the settlement represented a dangerous new formula in Indian jurisprudence — one that could be summarised as: liability, minus repayment, equals leniency.

It had specifically warned that the logic of the settlement — that recovering public money was more important than punishing the fraudster — was an argument that any sufficiently wealthy defendant could make. The publication had asked, in explicit terms: if the Sandesaras could buy their freedom from an Albanian passport, criminal fraud charges, and Interpol Red Notices, who would be next? The answer arrived in March 2026, less than four months after the settlement was completed.

Inventiva had also pointed to the structural perversity of the settlement’s incentive structure: a fraudster who flees India, parks assets offshore in a non-extradition country, and spends years running a profitable overseas operation is, by the logic of the Sandesara case, in a better negotiating position than one who stays. The fugitive can argue that prosecution is futile, extradition is impossible, and a discounted settlement is the best the system can achieve.

The person who stays, cooperates, and submits to the jurisdiction of the court has, by contrast, given up the very leverage that makes a settlement attractive to the other side. India’s legal system was, in effect, rewarding flight and penalising compliance — an incentive structure so perverse that it would have been difficult to design more effectively if one had tried.

V. The ADAG Case: When the Template Was Used Within Three Months

The FIR in the ADAG case was registered in 2025, though the fraud had been going on since 2007-08. That sentence, which appeared almost as a parenthetical in court filings, deserves to be treated as the central fact it actually is. Advocate Prashant Bhushan, for the petitioner, submitted that the first report about the misappropriation of funds came from the Bank of Baroda in 2020, but the FIR was registered only in 2025 after a complaint from the SBI.

Eighteen years between the alleged commencement of fraud and an FIR. Five years between a bank’s own internal forensic audit finding evidence of diversion and that bank filing a formal complaint. These are not administrative delays. They are a pattern — and it is a pattern that the Supreme Court noticed and named. The Supreme Court criticised the “unexplained delay” on the part of the Enforcement Directorate in investigating the alleged bank loan fraud of over ₹40,000 crore by ADAG companies and also criticised the CBI for registering only a single FIR with respect to the complaints received from various banks.

The scale of the alleged ADAG fraud dwarfs the Sandesara case in every dimension. The bench said it is estimated that the total fraud amount is around ₹73,000 crore. The PIL alleged systematic diversion of public funds, fabrication of financial statements, and institutional complicity across multiple entities.

The bench noted that a loan amount of more than ₹3,000 crore has been apparently settled by paying ₹26 crore — a recovery rate of less than one per cent on a specific transaction. And Bhushan pointed out that Reliance Communications, despite having debts of ₹47,000 crore, was sold for a mere ₹430 crore, roughly 1 per cent of its value, to a company belonging to Anil Ambani’s own brother. “The Insolvency and Bankruptcy Code is being misused like anything,” the CJI himself said.

Into this context, Anil Ambani filed his affidavit before the Supreme Court, citing the Sandesara settlement explicitly and at length. “The precedent set by the Supreme Court itself in the Sterling Biotech/Sandesara matter — where the court approved a full and final settlement for a family of declared fugitive economic offenders who had fled India, closing all FIRs and CBI proceedings, withdrawing Interpol Red Corner Notices, releasing attached properties, and absolving the liability of seven individuals and seven companies, upon a one-time settlement of ₹5,100 crore” — was cited verbatim in Ambani’s affidavit as justification for similar treatment.

Ambani argued: “The lenders willingly negotiated with the fugitive promoters, who had been declared fugitive economic offenders and had left India. On the contrary, I have given an undertaking to the Honourable Supreme Court that I will not leave the country without the permission of the honourable court.” He added that if a resolution was possible in the case of the Sandesara brothers and the Sterling group’s debt, it was “pragmatically and legally possible” in his company’s case as well.

The argument is legally elegant in its simplicity. The court cannot easily say: the Sandesara settlement was unique and cannot be used as a precedent. Because Anil Ambani’s lawyers are not asking the court to create a new legal principle. They are asking it to apply the principle it already applied four months ago.

VI. The Law That Was Designed to Prevent Exactly This

The Fugitive Economic Offenders Act, 2018, was passed specifically to close the escape route that Vijay Mallya, Nirav Modi, Mehul Choksi, and the Sandesaras had exploited. The law allows the confiscation of a fugitive’s Indian assets without criminal conviction. It was, in the words of the government that introduced it, India’s possible answer to the “flee and negotiate” strategy.

Critics argue that the settlement sets a terrifying precedent: that if you’re rich enough, smart enough to hide your money overseas, and lucky enough to flee to a non-extradition country, Indian law will eventually forgive you in exchange for a discounted cheque. The law, as it stands, does not permit compounding of such offences under statutes like the Prevention of Money Laundering Act, 2002, and the Fugitive Economic Offenders Act, 2018, both of which were enacted precisely to deal with cases like this.

The legal scholars who have examined the Sandesara order most carefully have noted that the Supreme Court appears to have approved a settlement that was, by the letter of existing law, not compoundable. The PMLA explicitly prohibits the compounding of money laundering offences. The court navigated this by framing the settlement not as a compounding of offences but as a quashing of proceedings in the exercise of its plenary constitutional powers under Article 142 — the provision that allows the Supreme Court to pass any order necessary to do complete justice. Article 142, in other words, was used to override the specific legislative intent of Parliament in enacting the PMLA and the Fugitive Economic Offenders Act.

This is not a trivial constitutional development. It means that two laws specifically enacted to prevent wealthy fraudsters from buying their way out of prosecution can be overridden by the Supreme Court’s inherent powers — provided the court decides, in its discretion, that recovering the money is more useful than securing a conviction. That discretion, exercised once, has now been cited by the next person in line.

VII. The Taxpayer’s Bill and the System’s Silence

Lost in the sophisticated legal arguments about peculiar facts, Article 142 powers, and pragmatic recovery is a simpler and more uncomfortable question: who pays for the difference?

If the Sandesaras owed ₹19,000 crore — by the most conservative estimate — and paid ₹5,100 crore, the gap is roughly ₹14,000 crore. That money does not disappear. It sits on the balance sheets of public sector banks as unrecovered bad debt. Those banks are recapitalised periodically by the government, using taxpayer money, to maintain their solvency ratios. The taxpayer, in other words, funds the difference between what the fraudster owed and what the fraudster paid.

An ED official said the development could incentivise fraudsters to first flee the country and then negotiate with financial institutions and investigative agencies. “These businessmen became fugitives only because they could afford to do so, and settling cases based on payment of dues does injustice to the hard work and investigation of probing agencies,” the official said.

The moral hazard created by the Sandesara settlement operates on multiple levels simultaneously. It tells future fraudsters that flight is a viable strategy, that overseas asset parking protects wealth from confiscation, that the passage of time erodes the state’s will to prosecute, and that a discounted settlement is available if you can demonstrate that prosecution is impractical. It tells investigating officers that the years of work required to build a case against a fugitive economic offender may be rendered worthless by a sealed-cover negotiation at the Supreme Court. And it tells the ordinary citizen — the one who cannot afford Mukul Rohatgi as their advocate — that the price of freedom in India is calibrated to your bank balance.

VIII. The Question the Court Has Not Answered

The Supreme Court, in its Sandesara order, explicitly stated that it was not creating a precedent. Within four months, that non-precedent had been cited in a formal affidavit before the same court by a defendant in one of the largest alleged corporate fraud cases in Indian history. The court will now have to decide whether its own reassurance — that this was a one-time arrangement for peculiar facts — holds under the pressure of a demand for equal treatment that is, at its core, difficult to dismiss without explaining why the Sandesara facts were so peculiar as to be unrepeatable.

The Supreme Court order raises an immediate question: why must the Sandesara matter be brought under the category of “peculiar facts” — to be not treated as a precedent for other fugitive economic offenders of nearly equal magnitude? Does the existence of an extradition treaty or deportation provisions with the countries of refuge deprive them of the same legal remedy?

If the answer to that question is yes — only non-extraditable fugitives qualify for the sealed-cover settlement — then Anil Ambani’s argument collapses, because he remains in India. But if the answer is no — because the underlying logic of prioritising recovery over prosecution applies regardless of the accused person’s location — then the settlement template is available to every wealthy defendant who can write a sufficiently large cheque.

India’s Supreme Court built this door in November 2025. It said, simultaneously, that the door would not be used again. In March 2026, someone knocked on it.

The court has not yet answered the knock.