- within Law Department Performance, International Law and Energy and Natural Resources topic(s)
EXECUTIVE SUMMARY
- Supreme Court allowed quashing of multiple criminal and regulatory proceedings after a full settlement of INR 5,100 crore.
- Judgment prioritizes economic restitution over prolonged litigation.
- Supports One-Time Settlement (OTS) and Insolvency and Bankruptcy Code (IBC) for faster resolution.
- Full payment required; decision marked non-precedential to prevent misuse.
- Policy shift toward practical resolution and business confidence.
The Supreme Court's decision in Hemant S. Hathi & Anr. v. CBI & Ors. is a landmark in India's regulatory approach. The Court quashed criminal, PMLA, SFIO, and other proceedings after petitioners agreed to pay INR 5,100 crore as a final settlement of bank dues.
This ruling, though non-precedential, signals a shift toward economic restitution over punitive enforcement. The Supreme Court exercised its equity powers vested in it to balance public interest with ease of doing business in India. When public money is fully recovered, continuing criminal cases add little value. The Court endorsed consolidation of overlapping actions, reducing litigation burden and uncertainty.
The judgment strengthens OTS and IBC processes by integrating insolvency and criminal law. It shows that genuine repayment can lead to closure, encouraging quicker settlements and improving NPA resolution.Critics fear a "pay-to-escape" perception, but the Court imposed safeguards: full payment, higher settlement figure, and explicit non-precedent status. This balances recovery with accountability.
The decision also aligns with India's Ease of Doing Business goals. By removing an eight-year litigation overhang, it boosts investor confidence and demonstrates a practical enforcement model.
In essence, the Sterling Biotech case reflects a renewed enforcement philosophy—prioritizing restitution, regulatory harmony, and finality without compromising integrity. Such pragmatic steps will be vital as India targets a USD 5 trillion economy.
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