ORDER :

The petitioner is a registered partnership firm. Initially, at the time of registration on 12.02.2014, Yarram Harika and Yarram Rajasekhar Reddy were the partners. Later, on the resignation of Yarram Rajasekhar Reddy, one G. Sai Deep was inducted as partner and a fresh partnership deed was executed on 19.12.2019.

2. The petitioner/firm purchased an Innova seven-seater vehicle bearing registration No. TS07 EQ799 by obtaining loan from respondents No.1 and 2/Karur Vysya Bank (for short ‘the Bank’) for a sum of Rs.15 lakhs. The vehicle was hypothecated with the Bank in terms of the loan agreement and hypothecation of the vehicle was incorporated in the RC book. The entire loan amount along with interest was repaid by the petitioner/firm as per the loan schedule and the date of payment of the last instalment was 21.12.2019. The loan account was closed.

3. The grievance of the petitioner/firm is that despite payment of the entire loan amount along with interest, respondent No.2 did not issue ‘no due certificate’ so as to enable it to produce the same before the RTA authorities for deleting the hypothecation entry in the RC book as well as the RTA records. That on the petitioner approaching the respondents/Karur Vysya Bank for issuance of NOC, there was no response. On a further request made by the petitioner for issuing NOC, reply dated 13.03.2020, was issued by respondent No.2 stating that the partners of the petitioner/firm stood as Directors/Guarantors to M/s. Akshara Infracon India Private Limited (for short ‘AIIPL’); that credit facilities availed by AIIPL were classified as Non Performing Asset (NPA) due to non-payment of the dues and that the respondents initiated SARFAESI proceedings against AIIPL and its Directors and Guarantors. Further, it was stated therein that as the partners of the petitioner/firm are having indirect liability with the Bank, the latter is unable to issue NOC for the vehicle loan.

4. The case of the respondents Bank is that the fact of retirement of the existing partner-Yarram Rajasekhar Reddy and admission of new partner-G. Saideep and subsequent changes have not been intimated to the Bank; that since the vehicle was hypothecated to the Bank by partnership firm represented by Yarram Rajasekhar Reddy and Yarram Harika (as evident from copy of RC), it was the primary duty of the partners of the petitioner/firm to duly inform the same to the Bank; that the admission of new partner and retirement of the existing partner was on 19.12.2019, which was prior to the closure of loan account on 21.12.2019 and that the petitioner has not taken any steps in that direction.

5. It is stated by the Bank that both the partners viz., Yarram Harika and Yarram Rajasekhar Reddy stood as guarantors to AIIPL, for the credit facilities availed by the latter from Bank; that as the credit facilities have become irregular, the account of AIIPL has become NPA on 30.12.2019; that therefore, demand notice dated 10.02.2020 was issued to AIIPL and its guarantors, for paying the outstanding amount of Rs.2,87,33,436.20 ps.

6. Further, it is stated that as per the agreement of guarantee dated 03.09.2013, the partners of petitioner/firm have extended their personal guarantee to the loans availed by AIIPL; that both the entities are interlinked as per the valuation report given by the Bank panel valuer; that the value of immovable properties was not sufficient to recover the entire dues; that the Bank deals with public money and it is the primary duty of the Bank to recover all the dues from the borrower/guarantor; that therefore, the Bank has not issued NOC to the vehicle and advised the petitioner/firm to clear all dues of AIIPL.

7. It is finally stated therein that as per para 15 of the agreement of guarantee dated 24.03.2015, the Bank has lien over securities/goods, which are existing with the Bank and related to other accounts and in particular, the Bank has lien over the vehicle of the petitioner/firm, even though the loan accoun