INDIAN OVERSEAS BANK vs M/S SCASA ORGANICS PVT. LTD. on 15 October 2026

1. 'I'hc rcspondcnt has hlcd thc instant caveat. Ms. I)ccpshikha Gupta has appcarcd for thc rcspondcnt. Accordingly, thc cavcat is dischargcd.

2. I{cspondcnt filcd thc SA bcaring No. 34ttl2025 titlcd as M/s SCASA Organics Private Limited V Indian Overseas llank which was statcd to bc pcnding bcforc thc I)lt'l'-lll, Chandigarh. I)R'I'-III, Chandigarh vidc final ordcr datcd 27.05.2025 has allowod thc SA and cluashcd thc SAITFAIiSI procccdings initiatcd by thc appcllant on thc ground that thc loan accounts wcrc classificd as NPA wrongly and illcgally in contravcntion of guidclincs issucd by thc Itcscrvc Ilank of India as wcll as thc ordcr passcd by thc IIon'blc Suprcmc Court of India. Ilowcvcr, thc libcrty is givcn to thc appcllant that thc appcllant may again initiatc thc SAI{IiAIiSI procccdir-rgs in accordancc with law. 'l'hc rclcvant po(ion of the final ordcr datcd 27 .05.2025 is rcproduocd as undcr:

(32) SA is allowcd. SAIII'AIi,SI procccdings initiatcd by thc respondent is quashed since initiation as loan accounts were classificd as Nl'}A wrongly and illegally in contravention of guidclines issued by lleserve Ilank of India as well as <lrdcr passcd by flon'blc Suprcmc Court of lndia. It is made clcar that rospondent may again initiatc frcsh SAI{I,'AI,I,SI proceedings according to law.

3. It is pcaiuent to mcntion that nonc of thc partics in thc SA has prcfcrred to file thc appeal. Sh. Sanjecv Ilhandari, Senior Counsel for the appellant stated that the appcllant has acccptcd thc final order dated 27 .05.2025 and decided to initiate the frcsh proceedings undcr thc SAI{I AIISI Act against the respondent. I-Ie further statcd that thc date of NPA was corrccted as 29.03.2021 from 31.03.2021 on the basis of the statcment of account and other relevant records thereafler fresh notice under Section l3(4) of the SAI{FAI,ISI Act dated 24.06.2025 was issued.

4. 'lhc rcspondcnt aflcr disposal of the SA vide order dated 27.05.2025 filed the misc. Application bearing no. 11012025 which is stated to be still pending before thc DI{I'-III, Chandigarh. l.hc DI{I-III Chandigarh vide ordcr dated 04.08.2025 has restrained the appellant to proceed further in pursuance of demand notice dated 24.06.2025 till next date fixed under the SAI{IIAIISI Act. I'he appellant has not challenged thc ordcr datcd 04.08.2025.

5. Sh. Sanjeev Bhandari, Senior Counsel statcd that vidc notification dated 15.09.2026 the appellant has invited the EOI (Expression of Interest) for ootransfer of Nl'}A loan exposures to AltCs and pcrmitted transferees" and thercafter that NPA account pcrtaining to thc respondent has already been assigned to another AI{C namcly CltM Assct I{cconstruction Company on 24.09.2026. Sh. Sanjeev Ilhandari furthcr stated that the DI{I'-III, Chandigarh vide order dated 28.09.2026 has ordercd to kcpt in abeyance the notification dated 15.09.2026 inviting the EOIs for transfcr of NPA loan accounts including the loan account of applicant till further ordcrs. Ihe appellant being aggrieved filed the present appeal.

6. 'I'he DRI'-UI, Chandigarh in the order dated 28.09.2026 also observed that the appellant in contravcntion of the restrain order passed by the DI{T has issued notification datcd 15.0g.2026 inviting thc IiOIs for transfer of NPA loan accounts which is not pcrmissiblc undcr thc law.

7. Sh. Sanjccv llhandari, Scnior Counscl for thc appcllant furthcr argucd that thc said dircction in thc impugncd ordcr datcd 28.09.2026 is in contravcntion of thc Scotion (5) ol thc SAI{FAIISI Act which authoriscd any financial institution to assign the outstanding dues of the debt to any ARC. It is further argued that the DI{|-III, Chandigarh in the impugncd ordcr dated 28.09.2026 has wrongly obscrvcd that thc lctter notification datcd 15.09.2026 was in contravention of the restrain order dated 04.08.2025. It is further argued that after transfer of the account thc ncw assigncc has the right to appear before the DI{T and also to parLicipatc in thc procccding ariscn duc to M.A. bearing no. I1012025 and also cntitlcd to take ovcr thc procccdings in accordance with law. In support of his argumcnt Sh. Sanjcev Ilhandari, Scnior Advocatc for thc appellant has cited the judgmcnt of thc Iligh Court of Judicaturc at Madras passcd on 30.11.2021titled as M/s AMll Pharma India Private Limited & othcrs v. Authorized Officcr lndian Overseas Ilank. tt. In thcsc circumstanccs, Sh. Sanjecv Ilhandari, Scnior Counsel for the appellant stated that the impugned order dated 28.09.2026 is bad in law and liable to be set- aside. I-Iowcver, during the course of thc arguments it is stated that the M.A. bcaring no. 11012025 is still pcnding and listed on 19.10.2026 and such direction can bc issued to thc DI{I'-I[, Chandigarh for disposal of the MA bearing no. llol2o25 as carly as possible without any unnccessary delay and further while dcciding thc M.A. bearing no. 11012025, thc DItI-[I, Chandigarh should not be influcnccd by any observation made in the order dated 28.0g.2026. It is also stated that all the pleas and contentions of the contcsting parties shall be allowed to be takcn which can bc taking during the hcaring of M.A. bearing no. 11012026 including the jurisdictional issues.

9. Ms. Dccpshikha (iupta, Counsel for the rcspondcnt dcfended the impugned ordcr datcd 28.09.2026 and statcd that thc notification datcd 15.09.2026 was not issucd in contravention of restrain order dated 04.08.2025. During the course of argumcnts, Ms. Gupta invitc the attention towards the notification dated 15.09.2026 and stated that it was pertaining to the "transfcr of NPA loan cxposurc to AIfC and permitted transferring" and it does not have any spcculation that it was issucd under Section (5) of the SAI{FAESI Act. However, she argued that M.A. bcaring no. 1 1012025 is listed on 19.10.2026 for final hearing altcl shc has r.ro objcction il- thc ncccssary dircction can bc issucd to thc I)lt'l'-lII, Chandigarh lor carly disposal of tl-ro M.A. bcaring No. 1 1012025.

10. In vicw of thc subrnissions maclc by thc rcspoctivc Counscls lor thc appcllant ancl tl-rc rcsponclcnt, thc prcscnt appcal is disposcd ol-with thc dirootion to thc I)lt'l'- III, Clrandigarh to dccidc thc M.A. bcaring no. 1 1012025 within a pcriod of ono month l}om thc datc of rcccipt o1'this ordcr. It is also madc clcar that at thc timc of Iinal clisposal, tl-rc I)l{'l' shall not bc inllucncccl with any obscrvation rnadc in thc ordcrs datcd 04.08.2025 and 28.09.2026. 'l'ho contcsting partics shall also bc at libcrty to raisc all thc issucs and contcr-rtions in accordancc with law inoluding thc jLrrisclictional issuc. 'l'lic pcnding application also stands disposcd of accordingly. I l. 'l'hc copy ol- this ordcr bc givcn to I)lt'l'-lll, Chandigarh for infurrnation and compliancc. -----fh.l---:--L--,a (Dr. Justicc Sudhir Kumar.Iain) Chairpcrson -p$