We haven’t received a reply yet, but here’s the answer:
The upper and lower price bands are determined using a statistical method based on the Black-76 option pricing model and are relaxed in accordance with movements in the underlying futures contract; it has nothing to do with the previous close. In the event of frozen price ranges even without a corresponding price relaxation in the underlying futures, the Exchange may relax the Daily Price Limit if deemed necessary, considering volatility and other factors in the option contract.
This didn’t just happen that day. You’ll see the previous close is above the upper circuit today as well.
This is actually fair because for deep out-of-the-money (OTM) options, the exchange has allowed trading within the fair price range.