The Great Sandesara OTS Escape

In a curious development, agreeing to the Central Government, the Supreme Court has allowed fugitive Sandesara brothers and their Sterling Group to go scot-free from all criminal cases filed by CBI, ED and Income Tax related to bank loan frauds by paying Rs5,100 crore, which is only 1/3 of the dues. The apex court bench comprising Justices JK Maheshwari and Vijay Bishnoi on November 19 allowed the fugitive Chetan-Nitish Sandesara brothers’ firms to deposit the money in the Registry by December 17 as One-Time-Settlement (OTS) to avoid all cases, including criminal cases registered by various probe agencies.

Flashback: There is an interesting timeline and mysterious developments in this case. Vadodara based Sandesara brothers’ firm Sterling Biotech and Sterling Oil and Energy were close associates of Congress heavyweight Ahmed Patel was engaged in the Pharmaceutical and Oil business and was having heydays during Congress regime till 2014. The Income Tax officers who raided their Mumbai office in 2010 were transferred and harassed by the Government.

In 2017, CBI caught the powerful firm and registered cases for multi-bank loan fraud, ranging to Rs16,000 crore. The Enforcement Directorate also filed cases and attached Rs9,800 crore worth assets and Income Tax also filed cases. Ahmed Patel’s son-in-law Irfan Siddiqui was also chargesheeted and case clearly mentioned his role and Patel’s son Faizal’s role in bribing Income Tax officers. CBI’s then Special Director Rakesh Asthana’s son was also an employee in Sandesara Group, and his daughter’s wedding expenses were also met by the fugitive Nitin and Chetan Sandesara, according to the Sandesara Diaries produced by noted lawyer Prashant Bhushan.

These diaries, also produced as records by the agencies, show the hawala / bribe payments by the Sandesara Group promoters and their firms to many officials and politicians in Gujarat, Mumbai and Delhi from 2003.

It is a well-known thing that the 2017-2018 tussle inside CBI started when the Director Alok Verma ordered for probe against his deputy Rakesh Asthana’s links with Sandesara brothers, who were having proximity with Ahmed Patel. When the cases got heated in 2017, Nitin and Chetan, along with their family, escaped from India using their illegal Albanian passport and parked in Nigeria.

In September 2020, when the entire country was locked down during Covid pandemic, Sandesara’s Chartered Accountants Hemant S Hati and Chetan Jayantilal approached the Supreme Court with the current curious petition seeking One-Time-Settlement (OTS), seeking cancellation of all criminal cases from CBI, ED and Income Tax, SFIO and cases in Tribunals and under Black Money Act also. Even cases at Magistrate Courts for bribing officials, using illegal Albanian passports also sought for cancellation when OTS is allowed. They claimed already paid around Rs. 2,000 crore to banks. Senior lawyer Mukul Rohatgi appeared for the Chartered Accountants of the fugitive Sandesara brothers. How CAs can file petition on behalf of fugitive clients is another question.

Central Government agrees for OTS

The Central Government, represented by top Law officer Solicitor General Tushar Mehta filed a sealed cover on this curious OTS demanding petition filed by the fugitive brothers’ Chartered Accountants. On November 18, the Supreme Court agreed to the Government’s suggestion of accepting Rs5,100 crore as OTS and cancellation of all cases, including criminal cases. “The entire amount of Rs. 5100 crores… to get rid of all proceedings and to put a quietus to the litigation of criminal cases with respect to CBI, ED, attachments under PMLA, Fugitive Act, SFIO, black money and Income Tax,” said the Judges, showing benevolence to the curious petition.

The court observed, “If the petitioners are ready to deposit the amount as settled in OTS and public money comes back to lender banks, the continuation of the criminal proceedings would not serve any useful purpose.”

Now as per the Order, Sandesara brothers and Sterling Group of companies are scott-free from all cases by paying Rs. 5,100 crores which is only 1/3 of the dues to the Banks, by December 17. And ED’s attachment of Rs. 9,800 crore worth properties will be back to the fugitive Sandesara brothers and Sterling Group.

Here, the bigger question is how the Supreme Court used its powers under Article 142 to pass such a curious Order, giving escape from criminal cases by paying only 1/3of the bank loan frauds. Another question is why the Central Government agreed to meagre OTS and closing all the criminal cases of the fugitives from 2017, who were involved in bribery, corruption, smuggling, bank frauds and huge loss to the exchequer? The billion-dollar question is why such benevolence is given to the fugitives by the Central Government and the Supreme Court agreeing to it.