Supreme Court Settles Rs. 453 Crore Bank Debt Assigned to ARC for Rs. 375 Crore to Protect Running Industry (2026 INSC 1156)
Court category: Supreme Court
Court / details: Supreme Court of India
Location: New Delhi / Kolkata
In Atibir Industries Co. Ltd. v. State Bank of India & Anr. (2026 INSC 1156), the Supreme Court exercised equitable jurisdiction to resolve a Rs. 453.83 Crore stressed debt assigned to an ARC for Rs. 375 Crores, disposing of pending NCLT and DRT proceedings to save a running sponge iron factory.
CASE DETAILS AT A GLANCE
Case Title: Atibir Industries Co. Ltd. v. State Bank of India & Anr.
Court Name: Supreme Court of India (Civil Appellate Jurisdiction)
Coram / Judges: Surya Kant, CJI., Joymalya Bagchi, J., and V. Mohana, J. (Author)
Case Number: Civil Appeal Nos. of 2026 (Arising out of SLP (C) Nos. 21029-21030 of 2024)
Neutral Citation: 2026 INSC 1156
Order / Judgment Date: 26.10.2026 (October 26, 2026)
1. Executive Summary
In Atibir Industries Co. Ltd. v. State Bank of India & Anr. (2026 INSC 1156), the Supreme Court exercised its authority as both a court of law and a court of equity to resolve a multi-forum banking dispute involving a running sponge iron manufacturing unit. The Court ordered full and final settlement of an assigned debt of Rs. 453.83 Crores for a cumulative payment of Rs. 375 Crores, bringing parallel proceedings before the NCLT and DRT to a close.
2. Factual Background & High Court Proceedings
State Bank of India (SBI) classified the appellant's loan accounts as Non-Performing Assets (NPA) retrospectively from October 16, 2020, and initiated simultaneous actions in DRT-I Kolkata (OA No. 260 of 2022), NCLT Kolkata (Section 7 IBC), and under Section 13 of the SARFAESI Act. On March 24, 2023, SBI assigned the Rs. 453.83 Crore debt to CFM Asset Reconstruction Company (Respondent No. 2) for Rs. 250 Crores under Section 5 of the SARFAESI Act. While a Single Judge of the Calcutta High Court quashed the NPA classification and assignment citing RBI COVID-19 moratorium circulars, the Division Bench reversed that ruling on July 25, 2024, holding that NPA classification is borrower-wise.
3. Justice Anil R. Dave Report & Equitable Resolution
Before the Supreme Court, the borrower deposited the entire Rs. 250 Crores acquisition amount in structured installments. The Court appointed former Supreme Court Judge Justice Anil R. Dave to determine reasonable returns over and above Rs. 250 Crores. Justice Dave noted that the ARC refused to produce its financial statements despite allegations of competitor-backed funding, and calculated returns between 13% and 15% per annum.
4. Operative Directions
- Additional Payment: The appellant shall pay Rs. 125 Crores (over and above the Rs. 250 Crores already paid) to Respondent No. 2 within 12 weeks as full and final settlement.
- Release of Securities: Within four weeks of receiving Rs. 125 Crores, the respondents shall return all title deeds and release all mortgages and guarantees.
- Closure of Proceedings: Pending Section 7 IBC proceedings before NCLT Kolkata and OA No. 260 of 2022 before DRT-I Kolkata stand disposed of, subject to strict adherence to the 12-week timeline.
Citation: Supreme Court of India judgment in SLP (C) Nos. 21029-21030 of 2024 (2026 INSC 1156). For banking and DRT/NCLT advisory, visit https://sklawhouse.com/practice or contact https://sklawhouse.com/contact-us.