The Supreme Court of India has concluded a protracted legal battle between Atibir Industries Co. Ltd. and the State Bank of India (SBI) by mandating a final settlement figure of ₹375 crore. A three-judge bench, led by Chief Justice of India Surya Kant and including Justices Joymalya Bagchi and V. Mohana, issued the directive to resolve a commercial deadlock centered on the classification of the company's loan account as a non-performing asset (NPA) and the subsequent assignment of that debt to an asset reconstruction company. The order necessitates that the appellant pay an additional ₹125 crore, over and above the ₹250 crore already deposited during the pendency of the proceedings, to achieve a definitive resolution of the outstanding liability.

The dispute originated from credit facilities, including cash credit, term loans, and letters of credit, extended to Atibir Industries by a consortium of banks led by SBI. Following the COVID-19 pandemic, the borrower experienced financial strain, leading to a series of negotiations and the eventual classification of its accounts as NPA. The company challenged this classification, citing various Reserve Bank of India (RBI) circulars regarding moratoriums, arguing that the bank had acted prematurely. The legal contention escalated through multiple forums, including the National Company Law Tribunal and the Debts Recovery Tribunal, while the bank simultaneously initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

The procedural journey of this litigation saw a Single Judge of the Calcutta High Court initially setting aside the NPA classification and the subsequent assignment of the debt, only for a Division Bench to reverse that decision. The appellant then sought relief from the Supreme Court, which intervened to preserve the company as a going concern while allowing the litigation to continue. To address the complexities of the debt valuation, the Supreme Court appointed former judge Justice Anil R. Dave to adjudicate the claims for interest and other liabilities.

In the ensuing report submitted to the court, Justice Dave analyzed the financial positions of the parties, noting that the debt had been assigned for a consideration of ₹250 crore. While the report explored various interest calculations—ranging from 13% to 15%—it also emphasized the need for a pragmatic resolution that balanced the business interests of the appellant with the rights of the assignee.

Reflecting on the nature of the judicial intervention, the Supreme Court emphasized the necessity of arriving at an equitable outcome that avoids protracted litigation. "This Court is not only the Court of law but also a Court of equity and the relief has been granted after balancing the interests of both parties and to do complete justice between the parties," the bench observed. By opting for a global settlement, the court sought to bypass technical arguments regarding the validity of the NPA classification and the procedural nuances of the debt assignment, which had been the subject of intense debate between the litigants.

The court further clarified the basis for its final directive, stating, "This amount has been fixed without going into the issue whether it is a return on investment or otherwise so as to bring an end to the dispute which is continued between the parties for years." By setting the final settlement at ₹375 crore—comprising the ₹250 crore already paid and the additional ₹125 crore now ordered—the court has effectively provided a roadmap for the company to discharge its debts and secure its assets.

The directions issued by the Supreme Court mandate that the appellant must remit the remaining ₹125 crore within 12 weeks. Upon the successful completion of this payment, the creditors are required to return all title deeds and release the securities and guarantees held against the loan. Furthermore, the court ordered that all pending proceedings before the National Company Law Tribunal and the Debts Recovery Tribunal be disposed of in accordance with this settlement.

This resolution marks a critical turning point for the industrial entity, which had faced the threat of insolvency proceedings. The court’s emphasis on maintaining the company as a running concern highlights the judicial prioritization of economic stability alongside the enforcement of debt obligations. The apex court also issued a firm caveat, noting that the relief granted was specific to the peculiar circumstances of the case and that any failure to adhere to the prescribed timeline would result in the forfeiture of the benefits of this judgment, allowing the creditors to revive their enforcement actions immediately.

The decision underscores the court's role in moderating complex commercial disputes where rigid adherence to statutory procedures might otherwise lead to the destruction of productive industrial capacity. By acting as a mediator in the final stages of the litigation, the Supreme Court has provided a sense of finality to a case that had spanned multiple years, balancing the interests of a large financial institution and an enterprise striving to manage its liabilities under challenging market conditions. The resolution now rests on the appellant’s ability to meet the final payment deadline, signaling the transition of the company from a state of intense legal and financial uncertainty to a settled debt position.