Assume a process execution interrupted at the middle and CPU started executing a different process.How does the OS handle this situation?
The way you worded the question, it sounds like the CPU starts executing a different process, and the operating system must react to this. But this is not how it works.
There are two ways to switch between processes. Both involve the operating system. One way is if the process calls the operating system. The other way is if an interrupt happens; in this case the CPU invokes an interrupt handler which is part of the operating system. In both cases, the operating system may take the decision to either return to the previous process, or to switch to a different process.