A bank cannot invoke a general lien under Section 171 of the Indian Contract Act, 1872, to refuse the issuance of an NOC for a vehicle whose specific loan has been fully discharged, as the hypothecation release is mandated by the Motor Vehicles Act, 1988.

JUDGMENT

The petitioner is the registered owner of a vehicle bearing registration No.KL-02-BF-4546. The said vehicle was registered with the 3^rd respondent and hypothecated with the 1^st respondent Bank through the 2^nd respondent. The petitioner states that he has paid the entire loan amount in respect of the said vehicle as evident from Ext.P2 statement of account issued by the Bank. However, the Bank is not issuing NOC and Form-35 even after lapse of months since the closure of loan account. The petitioner has filed this writ petition for the following reliefs:-

“ i) Issue a declaration that the respondents 1 and

2 cannot desist from issuing statutory documents for removing the entries showing hypothecation in the Registration Certificate when the entire dues to the Bank in relation to that particular vehicle is cleared.

ii) Issue a writ of mandamus or any other writ, direction or order directing the respondents 1 and 2 to issue NOC and Form 35 in relation to vehicle bearing registration No. KL-02-BF-

4546, forthwith.

iii) Or in the alternative, issue a direction to the

3^rd respondent to, remove the entries in the Registration Certificate on production of proof for clearing of entire liability with regard to the vehicle bearing registration No. KL-02-BF-

4546, without insisting Form 35 or NOC.

iv) To dispense the petitioner from producing the translation of the vernacular documents produced along with the writ petition.

v) Issue such other writ or direction or order as this Hon’ble Court deems fit and proper to grant in the facts and circumstances of the case.”

2. A statement has been filed by the respondent Bank wherein it is stated that the petitioner had availed two other loans, namely, a business loan and a vehicle loan and has defaulted payment of the said loans. Accordingly, it is contended that in the light of the general lien of Banker’s under Section 171 of the Indian Contract Act, 1872, the Bank is entitled to withhold NOC in respect of the subject vehicle.

3. It is to be noted that respondents 1 and 2 have no case that amounts are due from the petitioner in respect of vehicle KL-02-BF-4546.

4. The learned counsel for the petitioner referred to the decision in Amjath v. Manager, Indusind Bank Ltd [2024 (2) KLT 307] and also Exts.P3 and P4 judgments in support of his contentions.

5. In Amjath (Supra), this Court has held that the Bank cannot refuse an NOC relying on the principles of Banker’s general lien, as the endorsement in a certificate of registration regarding hypothecation or hire purchase is one as per the requirements mandated by the Motor Vehicles Act, 1988.

In the light of the decision in Amjath (Supra), I am of the view that non issuance of NOC on the basis of the principles of Banker’s general lien cannot be sustained. Accordingly, the writ petition is disposed of directing respondents 1 and 2 to issue Form-35 and NOC to the petitioner in respect of the vehicle bearing registration No.KL-02-BF-4546, expeditiously, at any rate, within a period of two weeks from the date of receipt of a certified copy of this judgment.