# State Bank of India vs. Amit Iron Private Limited & Ors.

> SC judgment dated 2026-04-07. Citation: TCN-2026-SC-00062. Two civil appeals arose from High Court judgments (Calcutta and Delhi) concerning the…

- **Court:** SC
- **Order date:** 7 Apr 2026
- **Citation:** TCN-2026-SC-00062
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/state-bank-of-india-vs-amit-iron-private-limited-ors-0xrr3

## Summary

### Background

Two civil appeals arose from High Court judgments (Calcutta and Delhi) concerning the classification of borrower accounts as 'fraud' by banks (State Bank of India and Bank of India). The High Courts, interpreting the Supreme Court's judgment in `State Bank of India and Others vs. Rajesh Agarwal and Others` (Rajesh Agarwal (supra)), had mandated personal hearings for borrowers and full disclosure of forensic audit reports before such classification. The banks and RBI contended that a notice, opportunity to reply, and a reasoned order were sufficient, and that personal hearings were not mandated by `Rajesh Agarwal (supra)` nor were full audit reports required to be furnished.

## Facts

On 20.08.2019, the loan account of respondent No.1 (Amit Iron Private Limited) was classified as a Non-Performing Asset (NPA) by the State Bank of India due to defaults in repayment obligations.

On 27.12.2023, the State Bank of India issued a show cause notice to the respondents (Amit Iron Private Limited & Ors.) alleging non-compliance with loan terms and fraudulent activity, asking why the account should not be categorized as 'fraud'.

On 08.02.2024, respondent Nos.1 and 2 submitted replies denying any breach of the terms and conditions of the loan agreement.

On 13.03.2024, the State Bank of India communicated to the respondents that the loan account had been classified as 'fraud' and a speaking order was communicated.

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## Issues and analysis

### Issue 1: Whether the decision in Rajesh Agarwal (supra) recognizes a right inhering in the account …

**Ratio:** The Supreme Court clarified that `Rajesh Agarwal (supra)` did not mandate a personal/oral

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**Reasoning:** Natural justice is a flexible concept, and its requirements vary with circumstances.

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**Interpretation:** The phrase "reply and representation" in `Rajesh Agarwal (supra)`

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**Application:** The procedure in RBI Master Directions 2024 (Clause 2.1.1.1 to 2.1.1.4), which

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## Parties

- **Judges:** K.V. Viswanathan,…; J.B. Pardiw…
- **Appellants:** State Bank of…; Bank of…
- **Respondents:** Amit Iron Private…; M/s Liliput…; +1 more
- **Other parties:** respondent No.1…
- **Advocates:** Tushar…; Venkatesh…; +3 more

## Timeline

- **2019-08-20 — NPA Classification (Amit…**: The loan account of respondent No.1 (Amit Iron Private Limited) was classified as a…
- **2023-12-27 — Show Cause Notice (Amit…**: The State Bank of India issued a show cause notice to the respondents (Amit Iron Private…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 19(1) — Personnel to extend co-operation to interim…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-19)

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