BNB v. Penjore case concluded

Tinley Nangai

The long-running legal battle between the National Bank of Bhutan (BNB) and private company Penjore over the latter’s default in loan repayments for its hotel in Bumthang has finally come to an end.

The Supreme Court upheld the lower court’s verdict on July 11, dismissing Penjore’s petition to the apex court seeking review of the 2016 verdict of the Bumthang Tsongkhapa court.

The Bumthang Dzongkha court had ordered Penjore to repay the loan he had taken from BNB for the construction of the hotel. The verdict noted that Penjore had not repaid the loan till February 2016, amounting to N25.268 million, including principal and interest.

The Dzongkha court ordered Penjore to repay the loan within three months of the verdict, failing which the BNB could auction the mortgaged land and property to recover the loan. The hotel has been closed since 2016 as the case has not yet been resolved.

The BNB yesterday tried to auction the Bumthang Hotel and other mortgaged properties in Penjore. But due to extremely low number of bidders and low bids, the BNB decided to re-auction the properties at a more favourable time in the future.

BNB officials said that as per the court ruling, the ownership of the hotel was transferred to BNB after Penjore refused to repay the loan a few years ago. BNB officials said that the interest rate on the mortgaged property was calculated and fixed by the court and the case has been resolved.

According to Penjore Request for review of lower court, Supreme Court decisions The case was examined under Section 31.2 of the Civil and Criminal Procedure Code of Bhutan 2021. This section provides that Petitioners must have legal status, and the petition matters must involve specific cases or disputes.

The Supreme Court dismissed the case based on Article 32.1 of the Civil Procedure Code, which states that if a party’s request is dismissed, the court shall preliminarily determine whether there are sufficient legal grounds to accept the case in accordance with the law, hear the case within the prescribed time limit or give written reasons.