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The National Company Law Tribunal (NCLT), Mumbai, has ruled that once a bank accepts full payment under a resolution plan and issues a No-Dues Certificate, it cannot later claim any extra money or assets of the corporate debtor.
The order was passed by Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar on 5 December 2025.
The case involved Bank of India and Pranav Constructions System Pvt Ltd. The bank had claimed a right over Rs 1.51 crore that was earlier deposited as earnest money for a proposed One-Time Settlement (OTS). The tribunal held that this claim could not continue after the company entered insolvency and the moratorium came into force.
The tribunal said that even if the bank had planned to adjust the money under the OTS, it lost that right after accepting full payment under the approved resolution plan and issuing a No-Dues Certificate.
The dispute came up after the resolution plan submitted by J Kumar Infraprojects Ltd was approved. J Kumar was the successful resolution applicant for Pranav Constructions. It asked for the release of Rs 1.51 crore that was lying in a no-lien account with Bank of India.
This money was deposited between February and March 2021 as earnest money for an OTS. However, the OTS never went through because insolvency proceedings began. The company was admitted into CIRP on 11 March 2022. The bank kept the money in a no-lien account and did not adjust it before this date.
J Kumar Infraprojects told the tribunal that Bank of India had already received more than Rs 20.80 crore under the approved resolution plan. The bank had also issued a No-Dues Certificate in April 2024, saying that nothing more was payable. It was argued that the bank could not keep any more money after this.
The tribunal agreed. It said that after insolvency starts, no bank or creditor can adjust, recover, or keep any money of the debtor based on old arrangements. Such actions are blocked during the moratorium period.
The tribunal also noted that Bank of India had accepted the resolution plan, voted in its favour, and issued a No-Dues Certificate. After receiving full payment, the bank had no right to keep the Rs 1.51 crore kept in the no-lien account.
The tribunal further explained that two fixed deposits of Rs 55 lakh and Rs 1.08 crore were created by J Kumar Infraprojects during the insolvency process. These were meant to protect provident fund and gratuity dues of the company’s employees. Since the exact dues are not yet verified, the money will remain kept aside for now.
Finally, the tribunal partly allowed the application. It directed Bank of India to release the full Rs 1.51 crore with interest to J Kumar Infraprojects within four weeks. However, the bank can keep the two fixed deposits until the employee dues are fully checked and paid.
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