INK N PAPER, MADHAPUR Vs. KARUR VYSYA BANK

JUDGEMENT

(1.) The petitioner is a registered partnership firm. Initially, at the time of registration on 12/2/2014, 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.15.00 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 dtd. 13/3/2020, 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 nonpayment 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.