Allowed

M.Mahalakshmi v. The Branch Manager

Madras HC9 Nov 2022WP/15404/2015

Case brief

AI extract

What is this about?

This writ petition challenged the refusal of a bank to issue a No Objection Certificate to a petitioner who purchased a vehicle from the original borrower after settling the loan amount. The Court directed the bank to issue the certificate and remove hypothecation.

What did the court decide?

Directed the respondents to issue No Objection Certificate, cooperate in removing hypothecation, and provide vehicle duplicate key if held by the bank.

M.Mahalakshmi Vs The Branch Manager — Contract and Commercial Disputes | Madras HC (2022)

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W.P.No.15404 of 2015

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED : 09.11.2022

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CORAM

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THE HONOURABLE MR. JUSTICE S.S.SUNDAR

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W.P.No.15404 of 2015

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M.Mahalakshmi ...Petitioner

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-Vs-

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1.The Branch Manager, Indian Bank, 165, Kutchery Street, Kattumannarkoil, Cuddalore District.

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2.Sakthivel

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...Respondents

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Prayer:- Writ petition filed under Article 226 of the Constitution of India praying for issuance of a writ of mandamus directing the 1^st respondent to issue No Objection Certificate to the petitioner for the vehicle namely Mahindra Tourist Maxi Cab- Van bearing Registration No.TN-31-AM-5968 in respect of the loan in THADCO loan No 606228095.

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For Petitioner : Mr.G.Pugazhenthi For R1 : Mr.R.John Joseph for Mr.O.S.Karthikeyan For R2 : No appearance

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https://www.mhc.tn.gov.in/judis 1/6

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W.P.No.15404 of 2015

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O R D E R

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This writ petition is filed for issuance of a writ of mandamus directing

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the 1^st respondent to issue No Objection Certificate to the petitioner for the vehicle namely Mahindra Tourist Maxi Cab - Van bearing Registration No.TN31-AM-5968 in respect of the loan in THADCO Loan No. 606228095.

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The petitioner admits that the vehicle referred to above was originally purchased by the 2^nd respondent with the financial assistance of the 1^st respondent's bank during September, 2012. However, it is stated by the petitioner that the 2^nd respondent could not make monthly instalments towards repayment of the loan to the 1^st respondent and hence he offered to sell the vehicle to the petitioner. The 2^nd respondent and the petitioner entered into an Agreement dated 16.09.2012 wherein it was agreed that petitioner would repay the entire loan amount of Rs.6,00,000/- to the 1^st respondent on behalf of the 2^nd respondent and paid the remaining sale price of Rs.4,00,000/- to the 1^st respondent. The payment of loan amount and settlement of dues to the 1^st respondent is not disputed. However, it is stated by the 1^st respondent that the

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https://www.mhc.tn.gov.in/judis 2/6

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W.P.No.15404 of 2015

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payments were received from the 2^nd respondent and that the 1^st respondent bank has no obligation to issue the No Objection Certificate to the petitioner for

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the vehicle as the petitioner is a third party to the loan agreement between the

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1^st and 2^nd respondents.

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In the counter affidavit it is admitted that the entire sum of Rs.8,10,000/- with a subsidy of Rs.2,64,500/- had been settled. However, it is stated by the 1^st respondent in the counter that the petitioner is neither the borrower nor the guarantor and in no way connected with the loan availed by

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the 2^nd respondent. It is further stated that there is no contract between the petitioner and the 1^st respondent and the contract between the petitioner and 2^nd respondent without the consent of bank will not bind the 1^st respondent bank.

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Admittedly the petitioner has purchased vehicle from the 2^nd respondent. Though it is disputed that the amounts had been paid by the petitioner towards discharge of the loan, from the stand taken by the petitioner that he had purchased the vehicle from the 2^nd respondent, this Court is unable to accept the

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case of the 1^st respondent that the payments were actually made by the 2^nd respondent to the bank. Be that as it may, the petitioner is now the owner of the

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https://www.mhc.tn.gov.in/judis 3/6

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W.P.No.15404 of 2015

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vehicle. Though there is no contract between the petitioner and the 1^st respondent, by virtue of the sale, this Court is unable to accept the case of the

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1^st respondent that the petitioner has no right to approach the 1^st respondent for issuing receipt or No Objection Certificate acknowledging the settlement of loan amount and the receipt of remaining dues under the said loan transaction. The 2^nd respondent, despite notice did not contest this writ petition. When the loan account is closed, the bank has no lien over the vehicle. However a no objection may be required to remove the “H.P” endorsement in the R.C. Book. The request of petitioner as a representation in interest of 2^nd respondent cannot be rejected. Unless there is specific Bar under any statute, the 1^st respondent is under a legal obligation to give No Due Certificate.

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Accordingly, the writ petition is allowed and a direction is issued to the 1^st respondent to give No Objection Certificate or No Due Certificate to the petitioner, by considering the representation of the petitioner dated 31.10.2014. The 1^st respondent shall also cooperate with the petitioner for issuing the required form with the signature and seal of the 1^st respondent's bank so that the petitioner would be in a position to remove the hypothecation endorsement and

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to get the vehicle registered in his name. The 1^st respondent shall also hand over

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https://www.mhc.tn.gov.in/judis 4/6

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W.P.No.15404 of 2015

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the duplicate key of the vehicle pursuant to the agreement entered with the 2^nd respondent if the bank has it. No costs.

09.11.2022

cda

The Branch Manager, Indian Bank, 165, Kutchery Street, Kattumannarkoil, Cuddalore District.

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https://www.mhc.tn.gov.in/judis 5/6

W.P.No.15404 of 2015

S.S.SUNDAR. J.,

cda

W.P.No.15404 of 2015

09.11.2022

https://www.mhc.tn.gov.in/judis

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M.Mahalakshmi v. The Branch Manager

Case brief

What is this about?

What did the court decide?

M.Mahalakshmi v. The Branch Manager

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

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