In a punitive action, the Navy has encashed a bank guarantee given by the Reliance Naval Engineering Ltd due to inordinate delay in supplying five offshore patrol vessel, and said Monday the deal is being looked into. "There is no preferential treatment being given to RNEL. Its bank guarantee has been encashed. Punitive action has been taken against it. The process is being taken forward," Navy Chief Admiral Sunil Lanba said at a press conference.

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The Navy Chief was asked about huge delay in delivery of the vessels by the company and whether Navy is under any pressure to not initiate any action against the company. Admiral Lanba said the deal is not being cancelled at the moment but added that it is being looked into, indicating that government may take a call on the issue.

The Navy chief also said that the company is undergoing corporate debt restructuring. There was no immediate reaction from RNEL about the Navy Chief's comments.

Anil Ambani's Reliance Defence has been at the centre of a controversy over the Rs 58,000-crore Rafale jet fighter deal. The Congress has accused the government of favouring the company. The company as well as the government have rejected the charges.

The original contract worth Rs 3,000 crore for five offshore patrol vessels was won by Pipavav Defence and Offshore Engineering in 2011. The company was bought over by Anil Ambani group in 2016.

According to the original contract, the first vessel was to be delivered by early 2015. However, the deadline was pushed several times.