If you don't understand why the Supreme Court (SC) judgement in the Sandesara Case is shocking and a big setback to fair resolution of failed businesses, then the facts of this story should open your eyes.
In 1998, a doctor couple, Satish and Rajvi Sharma, respected and ethical gynaecologists, started Craft Clinic (IVF Craaft India Pvt Ltd) in a rented 800sqft premises in Bandra to offer in vitro fertilisation (IVF). That was a time when success rates for IVF were low, and the practice grew rapidly, with patients coming from abroad to seek treatment. So they bought an 1,800sqft space to expand operations in 2001 and, by 2008, when waiting lists of patients sometimes stretched to two years, they decided to build a big, well-equipped IVF and genetics centre spread over 5,400sqft.
This was financed by a ₹8.7-crore term loan from Saraswat Co-operative Bank in December 2009 at a high effective rate of 17% interest (including penal interest of 2%), repayable after a one-year moratorium. While the building was completed by May 2010, the BrihanMumbai Municipal Corporation (BMC) did not grant the special licence required for an IVF and genetic laboratory until the building received an occupancy certificate (OC). It was a big mistake in understanding that many entrepreneurs make in underestimating delays in obtaining government permissions. That they had surrendered their licence to run the earlier laboratory turned into a double whammy.
So, over the next 18 months, the new clinic stood ready with equipment installed and staff recruited, but remained unoperational. Revenue stopped but the 17% interest kicked in. A partial OC was received in 2011 and the Bank could have helped restructure the loan to allow a viable project the chance to survive. It refused, even after the doctors paid ₹1 crore from their personal savings as a good-faith gesture in March 2012. Six months later, the account was classified as a non-performing asset (NPA) and assigned to Phoenix Asset Reconstruction Company (Phoenix ARC). The next 12 years were a nightmare.
Contrary to their name, ARCs in India operate like liquidation agents. It made no effort to revive the unit, restructure loans, provide working capital, or even accept a one-time settlement (OTS) of ₹8 crore, which was offered by an investor in June 2017. Instead, it allowed the high contractual interest to continue and sold assets between 2021 and 2024 at a fraction of their actual value.
Their old clinic of a Rs1,800sqft, bought in 2001, was sold for ₹1.6 crore, when its fair value was ₹3 crore. Three floors of the new clinic, measuring 5,400sqft and purchased in 2010, were sold for ₹8.6 crore, despite the fair value being approximately ₹13 crore.
The total recovery was ₹9.15 crore against the original loan of ₹8 crore. Yes, there was interest outstanding, but Phoenix ARC inflated the claim to ₹80 crore after compounding interest and adding charges. It now wants to extract even more out of the doctors’ remaining savings and has filed for personal insolvency against them under Sec 95 of the Insolvency and Bankruptcy Code (IBC), from the doctor couple who are almost 60 today. Their primary fault was failing to understand the risks associated with municipal permissions and bankers who refused to stand with them.
While the doctors were writing desperate letters to Phoenix ARC begging for a chance to restart their practice, check the contrasting treatment offered to those who were declared ‘fugitive economic offenders’ and faced civil and criminal proceedings.
Sandesara and Sivasankaran
Yes, we are talking about the Sandesaras of the Sterling Biotech group, whose shenanigans have been tracked by Moneylife over the past several years. On 19 November 2025, the Supreme Court sent ripples of disbelief across the corporate world by permitting Nitin and Chetan Sandesara, earlier declared as fugitive economic offenders in a ₹14,000 crore–₹16,000 crore bank fraud case, to make an unbelievable deal. (Read: Supreme Court Clears Sandesara Brothers of Criminal Charges on ₹5,100 Crore Settlement Offer)
How was it done? J Gopikrishna, writes in The Pioneer: “The Central Government, represented by top Law officer Solicitor General Tushar Mehta, filed a sealed cover on this curious one-time-settlement (OTS) demanding petition filed by the fugitive brothers’ Chartered Accountants. On 18 November, the Supreme Court agreed to the Government’s suggestion of accepting ₹5,100 crore as OTS and cancellation of all cases, including criminal cases…The entire amount of ₹5,100 crore 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.. (Read: Sterling Biotech: Court Declares Sandesara Brothers Fugitive Economic Offenders)
The two-judge bench of justices JK Maheshwari and Vijay Bishnoi 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.” Significantly, they said this would be a one-off case and not be treated as a precedent. There is no explanation for why the Sandesaras deserve special treatment when they are fully capable of paying all their dues.
The Sandesaras fled India eight years ago, when banks demanded payments and the central bureau of investigation (CBI), directorate of enforcement (ED) and income-tax (I-T) department began investigations for various offences, including money laundering. They spent a comfortable eight years in Nigeria, where they have a thriving oil business. In effect, the group, which is fully capable of paying the interest that is due to banks, will obtain judicial amnesty against prosecution by paying one-third of the money due to banks by 17th December. But this is not the only such travesty.
In 2022, the SC approved an OTS plan for C Sivasankaran's Siva Industries, which owed banks nearly ₹4,863 crore. The settlement, amounting to ₹328 crore, resulted in a staggering 93.5% haircut for lenders, including major public sector banks. This was also called a ‘one-off’ order that was ‘not a precedent’. The same Sivasankaran, a citizen of Seychelles, and his family, are now in negotiations to buy the late Ratan Tata's Seychelles villa for approximately ₹55 crore, reports the Times of India. It also says that this offer is significantly higher than the property's official valuation.
Different Strokes for Different Folks
No one is suggesting that a recovery is undesirable. Banks need to get their money back. But the contrast between how smaller and more honest businesses are treated compared to the more powerful defaulters is impossible to ignore– especially when losses to banks and the exchequer from the latter are so much larger.
Micro, small and medium enterprises, known as MSMEs, get no sympathy, restructuring or respite, even when they are affected by things beyond their control, such as civic delays, disruption due to a new tax rollout (goods and services tax), demonetisation, or sudden crash in commodity prices. Moneylife has repeatedly documented their plight when ARCs move in like vultures after banks fail to stand by businesses in times of stress. Assets are often sold at a fraction of their value, and personal guarantees, offered by desperate entrepreneurs, are invoked, leaving the promoters destitute and devoid of hope. There is no incentive or support for revival.
These cases highlight how the Indian financial system does not distinguish between fraud and misfortune, but supports those who can buy influence. A simple, honest application of existing guidelines on viable restructuring, reasonable interest caps in genuine hardship cases, with accountability for manifestly suboptimal asset sales by ARCs, would save the dreams of thousands of entrepreneurs, like this doctor couple. It is these entrepreneurs and their MSMEs who are the true backbone of India’s economy and the largest generators of employment. Yet, every few months, a new ‘one-off, non-precedent’ blessed by the SC offers a stark reminder of how the law works differently for some, with the apex court willing to selectively ‘wipe the slate clean’ for select defaulters and allowing them to retain control of their businesses.
The contrast between how influential borrowers are treated is sending a loud message to entrepreneurs that the system doesn’t work for them. The Sandesara and Sivasankaran decisions have dealt another blow to the already weakened bankruptcy law. Even worse, they signal that criminal liability can be selectively bargained in court.
If bankruptcy becomes a privilege for the powerful and a punishment for the honest, India risks dismantling entrepreneurship rather than encouraging it.
This judgement is really surprising. But equally surprising is the silence of opposition parties. This is a fit case for organising a protest or a organise a march demanding full recovery from Sandesaras. They are spending time on Vote Chori protests. But if this issue is highlighted it will catch the public attention.
Suzlon is another strange case where a big haircut was taken by the lenders without even going to thru the IBC. Surprisingly no news portals/ channels or even political parties raised any red flags in this out of IBC settlement!
This is very shame full that not the bank and goverment want to lysine my janune problem .
I write many mails to bank and rbi for OTS my home lone account but I can't got any response from them .
I don't have any other options to take the same stap like others are doing.
It is a shame how the Indian system are operating. The powerful supported by the corrupt political system can get away with anything illegal, whereas the ordinary honest citizens are made to suffer who bothers even if they die. The corrupt are protected by all the so called four pillars of democracy. Will India ever change or will it deteriorate further.
I am facing the same problem from icici bank .
I am suffering from financial problems after the COVID-19 pandemic by business is stop.
I requested several times from the bank to OTS my lone account but they are not interested.
I write many mails to the bank but I don't gote any response from the bank side .
Theres a Supreme Court judgement by the name, Sardar
and sons Vs PNB and Mardia Chemicals where the SC has observed NPAs require to be settled under OTS. Consult a lawyer.
I hope it serves your purpose.
Utterly shocking! Dr. Sharma's good faith error of not comprehending the regulatory risk was rectified by him, but cost 18 months. The bank's insensitive approach landed their IVF company with ARC. It is clear that the ARC did everything but reconciliation! The result: destruction of a promising venture that would have brought forex income, and destruction of the doctor couple as well!
This is not an isolated case. The government must amend recovery laws to fix such tragedies including suicides.
Judiciary only mirrors the general population. We get what we deserve. Influence is more powerful then honesty. We all know how many transfers honesty will get you. Money and political influence is power. Unchecked power is not justice
When we elect a 4th pass , a person who enjoys international tours and luxury ???? such incidents are the rules not uncommon . We are paying for all the sins of others and this is just the beginning of debt burden on the people while rich will enjoy Arabian nights
India’s economy continues to post headline numbers that would make most finance ministers envious. Gross domestic product (GDP) is forecast to grow 7.4% in FY25-26, according to the National Institute of Public Finance and Policy...
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Fiercely independent and pro-consumer information on personal finance.
30-day online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
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This is very shame full that not the bank and goverment want to lysine my janune problem .
I write many mails to bank and rbi for OTS my home lone account but I can't got any response from them .
I don't have any other options to take the same stap like others are doing.
I am suffering from financial problems after the COVID-19 pandemic by business is stop.
I requested several times from the bank to OTS my lone account but they are not interested.
I write many mails to the bank but I don't gote any response from the bank side .
and sons Vs PNB and Mardia Chemicals where the SC has observed NPAs require to be settled under OTS. Consult a lawyer.
I hope it serves your purpose.
This is not an isolated case. The government must amend recovery laws to fix such tragedies including suicides.