The Supreme Court questioned SEBI for not closing its investigation against the Sandesara brothers despite its earlier order to end proceedings after payment of Rs 5,100 crore. The Court asked why the regulator was “coming in the way” when the payment condition had already been fulfilled.
New Delhi: The Supreme Court of India on Monday (March 16) questioned why the Securities and Exchange Board of India has not yet closed its investigation against the Sandesara brothers despite an earlier order of the Court directing that all proceedings should be quashed after the payment of a specified amount.
During the hearing, the Court expressed concern that the market regulator was continuing with its probe even though the conditions laid down in its previous order had already been fulfilled.
Counsel appearing for the Sandesara brothers informed the Court that SEBI had refused to close its investigation even after the promoters complied with the apex court’s November 2025 order. According to the counsel, the brothers had deposited an additional ₹5,100 crore as directed by the Court, but the regulatory authority had still not withdrawn the pending proceedings.
In November 2025, the Supreme Court had passed an order directing that all pending investigations and legal proceedings against the Sandesara brothers should be closed once the additional payment of ₹5,100 crore was made. The Court had clarified at that time that the payment of this amount would bring an end to the ongoing legal issues connected to the matter.
The case is linked to a SEBI investigation into allegations that the promoters had taken loans from foreign banks and then routed those funds back into their own company in the form of investments. Investigators suspected that this financial arrangement could have created a misleading impression before investors about the company’s financial strength.
When the matter came up before the bench, the judges questioned the regulator’s conduct and asked why SEBI was continuing with the investigation despite the Court’s earlier directions. The bench specifically asked why the authority was “coming in the way” when the previous order had clearly stated that all cases should be quashed once the payment condition was fulfilled.
The Court further observed that since the required amount had already been deposited by the promoters, there should be no reason for any investigation or proceeding to continue. According to the bench, once the Court had ordered closure of the cases subject to payment and that condition had been satisfied, all pending proceedings were required to end.
The judges also addressed the issue of the funds deposited by the promoters. The Court said that the amount deposited should ultimately be transferred to the banks involved in the matter, indicating that the purpose of the payment was to address the financial liabilities arising from the disputed transactions.
The matter highlights the continuing legal dispute between the promoters and the market regulator regarding the closure of investigations despite compliance with the Court’s earlier directions. The Supreme Court’s observations suggest that it may examine whether SEBI’s continued probe is consistent with the terms of its previous order.
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