A bank cannot refuse NOC on a specific vehicle citing prior lien on other loans; writ jurisdiction can compel issuance of statutory documents when refusal is illegal.

EASWARAN S., J --------------------------------------------------

W.P.(C) No.16040 of 2026 --------------------------------------------------

Dated this the 5^th day of May, 2026 JUDGMENT

1^st Petitioner is the registered owner of a contract carriage bearing registration No.KL-67-713. The vehicle was handed over to the second petitioner under an agreement Ext.P2. The first petitioner had hypothecated the vehicle with respondents 1 and 2 as a security for availing a vehicle loan. The petitioners submits that the loan was restructured and an amount of Rs.3,87,028.97/- was paid during August, 2025 as per the terms of the restructure agreement and the 1^st petitioner continued to remit the EMI amount for Rs.44,600/- during four months after July, 2025. Later, the 1^st petitioner had noticed a mistake when his last EMI was returned to the senders account and accordingly the amount fell in arrears. Though the petitioners approached the respondents 1 and 2, it is stated that the Bank is insisting to clear the dues in relation to the other vehicles which are hypothecated. The petitioners further submit that the amounts under the following loan accounts are due to the respondent Bank but however, all the loans are covered by separate hypothecation agreements and wherein the security to the same are different vehicles. The details of the three accounts stated by the 1^st petitioner are as follows:

Petitioners further submit that the insistence of the respondents to clear the arrears in respect of other loan accounts is not justified and also the refusal to issue NOC and Form No.35 is also not justiciable. Reliance is placed on the judgments in Writ Petition No.16895 of 2022 and Writ Petition No.29209 of 2022 (Exts.P3 and P4). The petitioners thus pray that direction be issued to the respondents 1 and 2 to adjust the amount offered to be remitted by the petitioners in respect of Vehicle No.KL-67-713 and to issue statutory documents for removing the hypothecation on clearing the entire amounts.

2. Heard Sri.K.C.Vincent, learned counsel for the petitioners, and the learned Standing Counsel for respondents 1 and 2 and the learned Government Pleader for respondent No.3.

3. The learned Counsel for the petitioners submitted that going by the decision of this Court in Amjath Vs Manager, Indusind Bank.Ltd [2024(2) KLT 307], the respondent bank cannot refuse an NOC relying on the principles of Banker’s lien and hence the bank is liable to be compelled by this Court to issue the NOC on the petitioners remitting the amounts. 4. Per Contra, the learned Standing Counsel appearing for the respondents 1 and 2 submits that the writ petition is not maintainable since respondents 1 and 2 are private institutions and hence no direction can be issued. Reliance is placed on the decision of the Division bench of this court in Ajithkumar Vs The Indusind Bank Limited [WA.No.

416 of 2025, dated 17-7-2025]

5. On consideration of the submissions raised across the Bar, this Court is of the considered view that the points raised in the writ petition is squarely covered in favour of the petitioners by Exts.P3 and P4 judgments and also by the decision in Amjath (supra). Admittedly, respondents have not filed any appeal against the decision of the Single Bench in Amjath (supra). Hence they cannot take a different stand in the present case. At any rate when it is shown by the petitioners that there is refusal on the part of the bank to issue NOC which is the requirement of law, certainly, such refusal qual