Allowed

Punjab National Bank v. Nck Engineering and Contracting Services Pvt. Ltd.

DRT6 Apr 2026MA/55/2026

Case brief

AI extract

What is this about?

The Tribunal allowed a miscellaneous application to issue a recovery certificate after a respondent defaulted on a joint compromise installment. The bank was directed to get a certificate for the original claim plus future interest, less the amount remitted, and future asset sale was directed.

What did the court decide?

Recovery certificate issued for the claimed sum less 6 Lakhs remitted; OA schedule property directed to be sold on failure to pay.

Punjab National Bank versus Nck Engineering and Contracting Services… — Arbitration | DRT (2026)

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Fair order

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IN THE DEBTS RECOVERY TRIBUNAL-1 AT ERNAKULAM

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DATED THIS 06^th DAY OF APRIL, 2026

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PRESENT: Su. WILLYAHM, B.Sc., M.L. [DISTRICT JUDGE - Retd] PRESIDING OFFICER

MA No.55/2026 in

OA No.544/2019

Between

Punjab National Bank Eranhipalam Branch Naizam Arcade, East Nadakkavu Kozhikode – 673 006 Represented by its Senior Manager

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---Petitioner Bank

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And

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M/s. NCK Engineering and Contracting Services Pvt. Ltd. 27/311 C, V. K. Complex I.G. Road, Aryadathpalam Kozhikode – 673 004

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Abdul Navaf

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S/o. Nalamchirackal Muhammed Aluvangal House, Kolathara P.O. Kozhikode – 673 655

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Sara Sulaiman

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W/o. Karadan Sulaiman Flat No.12 C, Malabar Builders Jawahar Nagar, Kozhikode – 673 004

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---Respondents

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MA No.55/2026 in OA 544/2019

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This Miscellaneous Application coming on 27.03.2026 for hearing before me in the presence of Mr. Rajeevu, Advocate representing Mr. C. Ajith Kumar, Counsel for the Petitioner Bank and upon hearing arguments of learned representing counsel for the Petitioner Bank and upon perusing the material on records, this Tribunal delivered the following:

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O R D E R

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This Miscellaneous Application has been filed by the applicant bank seeking to issue a Recovery Certificate for the entire amount claimed by the applicant in the OA, less the sum of Rs.6,00,000/remitted on 24.02.2021, in the interest of justice.

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The counsel for the petitioner bank has filed the present petition stating inter alia that the above Original Application has been filed on 13.11.2019 under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993 (in short ‘the Act’) for recovery of the sum of Rs.55,37,306/- with future interest @13.25% per annum plus 2% penal interest with monthly rests from 11.11.2019 till realisation being the amount due under Cash Credit Account No.4272008700002121 and by sale of OA schedule property and with cost.

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When the OA was taken up for hearing on 03.05.2021, the applicant bank filed a joint compromise petition IA No.698/2021 settling the matter for Rs.30,00,000/- (Rupees Thirty Lakhs only); and prayed for recording the compromise and disposing of the OA in terms of the compromise, and pass final order accordingly. In view of the compromise, the OA was disposed of on 03.05.2021 as per the compromise terms in IA No.698/2021.

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As per the terms of the joint compromise, the defendants agreed to pay a sum of Rs.30,00,000/- to the applicant in two installments i.e. Rs.6 Lakhs had to be remitted on 24.02.2021 and the balance of Rs.24 Lakhs had to be deposited on or before 20.05.2021 and that in the event of failure to pay the amount as aforesaid, the defendants shall forfeit the benefits of compromise and they shall have no objection for issuance of Recovery Certificate for the entire amount claimed in the OA with interest and costs, less payments effected subsequent to the compromise, on filing of necessary application before the Tribunal intimating the instance of such default.

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Page 2 of 4

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MA No.55/2026 in OA 544/2019

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According to the petitioner bank, the defendants have remitted only a sum of Rs.6,00,000/- on 24.02.2021 as per the joint compromise and, therefore, they are entitled for a Recovery Certificate in terms of the default clause set out in the terms of the compromise. Therefore, this Tribunal holds that the applicant bank is entitled for a Recovery Certificate in terms of the default clause set out therein.

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The applicant bank has charged Rs.3,06,226/- as penal interest on the cash credit account availed by the 1^st defendant in terms of the agreement. It is well settled that penal interest cannot be capitalised and no interest can be charged on penal interest. The applicant bank, therefore, is not entitled to get any further interest on the aforesaid amount of penal interest, as laid down by the Hon'ble Supreme Court of India in Central Bank of India v. Ravindra [reported in AIR 2001 SC 3095] .

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In the light of the above, MA No.55/2026 stands allowed. The Registry is hereby directed to issue Recovery Certificate in terms of the joint compromise petition. In the result, the Original Application is allowed as per the following lines :

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“The defendants are directed to pay to the applicant bank, jointly and severally, a sum of Rs.55,37,306/- (Rupees Fifty Five Lakhs Thirty Seven Thousand Three Hundred Six only) due under the Cash Credit Account No.4272008700002121 with future interest on the sum of Rs.52,31,080/- (Rupees Fifty Two Lakhs Thirty One Hundred Eighty only) @13.25% per annum from 11.11.2019 till realisation less the sum of Rs.6,00,000/(Rupees Six Lakhs only) credited on 24.02.2021.”

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On failure to pay the above said debts to the Applicant Bank, the Applicant Bank is directed to bring the OA schedule property, for sale to realize its dues and its proportionate costs.

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The Registry is directed to prepare DRC in terms of this final order. The Applicant Bank shall file memo of costs within 10 days from the date of this order. Registry is directed to communicate the copy of this order to both parties as provided in Rule 16 of the Debts Recovery Tribunal (Procedure) Rules, 1993, as amended in 2003.

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Typed by PS, transcribed, corrected and pronounced by me in the open court this the 06^th day of April, 2026.

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(Su. WILLYAHM) PRESIDING OFFICER

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Page 3 of 4

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MA No.55/2026 in OA 544/2019

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SCHEDULE OF PROPERTIES

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SCHEDULE – ‘A’

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State	:	Kerala
District	:	Malappuram
Sub District	:	Edakkara
Taluk	:	Nilambur
Village	:	Edakkara
Tenure	:	Jenmom
Re. Sy. No.	:	1186/2A
Extent (in cents)	:	85 Cents

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DESCRIPTION OF PROPERTY

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All that pieces and parcels of land admeasuring 85 cents in Re. Sy. No.1186/2A of Edakkara Village, Nilambur Taluk, covered by Sale Deed No.4393/2004 of Edakkara SRO.

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BOUNDARIES

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East	:	River
North	:	Property of Kunhipathu, Firoz & others
		and pathway
West	:	Property of Sara
South	:	Property of Salam Haji

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(Su. WILLYAHM) PRESIDING OFFICER

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Page 4 of 4

Punjab National Bank v. Nck Engineering and Contracting Services Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. Nck Engineering and Contracting Services Pvt. Ltd.

Case brief

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