Reg: noc for second hand car
Shazia Hassan
(Querist) 31 July 2017
This query is : Resolved
Hi,
I have purchased a CAR in year 2012 from Indore by Mr. Praveen Kumar Khosla. The deal was finalized in 3,92,000 Rs out of which I paid 1, 30,000 Rs in cheque 61,000 Rs in cash and rest 2,01,763 Thousand was outstanding amount on Car loan from HDFC bank on Vehicle. As per the deal document, i had to pay the Load amount which I paid and finished the loan amount in September 2014. After the loan payment I kept asking the ex-owner regarding the NOC from the BANK so that i can register the car on my name, but this guy always came up with some excuses and never gave me clear answer for NOC. I connected with HDFC bank and got to know that the NOC cannt be generated because Mr. Praveen Khosla has some dispute with the Bank regarding non payment of a credit card. I am stuck as Mr Praveen is saying that he is in legal battle with the bank and cant provide me the NOC. it is more than 3.5 years and I cant register the car on my name nor I can sell it.
I need urgent help in this regard.
Keshav Rao N
(Expert) 01 August 2017
There is no right or wrong answer to your query.It is more an issue of Practice of Banking.In the instant case there is no contract between you and the Bank,so no claim from your side will be entertained by them.With respect to the seller/owner of the car Bank is arm-twisting him to pay-up some other dues by withholding to lift their lien on the motor vehicle.In law this is patently wrong as the debt which was incured for the vehicle purchase has been fully paid.Howevwer,banks have this tendency to exercise general lien on other assets and hold the borrowers to ransom.Law doesnot accept this and there are many judgements where they have not recognised the concept of general lien.So the alternative left to you is to send a legal notice tot he owner for breach of contract and threaten legal action.This may or may not scare him.For whatever it is worth a copy of the notice may also be sent to the Bank.The bank may put some pressure on the owner and try to get their credit card dues settled.Going to court is no option as it will take decades for you to get any result.
Just for academic information for those who are reading this,the correct solution to such a situation is to take up the outstanding liabilty from the bank and step into the shoes of the owner.Once you repay there is no further reference to the former owner and you deal with the bank in your own right.Anyway,this in hindsight in this case.
Maybe,other banking experts might have a different take on the issue.I would be obliged to be enlightened by such opinion.
Rajendra K Goyal
(Expert) 01 August 2017
You can lodge FIR against the previous owner.
Alternately have amicable settlement with the previous owner.
Keshav Rao N
(Expert) 01 August 2017
About the opinion expressed above I had occasion make some search and find that the Bankers General Lien has been upheld in many cases.However,we donot know the terms and conditions of the loan documentation executed for the Vehicle Loan...whether there is some express prohibition for exercising generallien for other dues also.If it is there then the first Owner can complain to Banking Ombudsman or agitate the matter in Consumer Grievance Redressal Forum.But for all this the owner should be open for a dialogue.
Rajendra K Goyal
(Expert) 01 August 2017
Bankers have right of general lien on the assets it held in the name of borrower. It can set off the debt in the name of borrower though the asset may not be mortgaged / assigned / hypothecated for that loan.
Legally you have no cause of action against the Bank, try to proceed through seller / borrower.
P. Venu
(Expert) 01 August 2017
Was the sale of the car with the concurrence of the Bank? How was the EMIs paid subsequent to the purchase of the car?
Keshav Rao N
(Expert) 01 August 2017
This is to the experts.
In case of general lien or set off a banker has possession of some asset which the banker can realise to satisfy the outstanding liability.Case in point is holding FDRs in name of borrower or gold ornaments pledged as security for loan which is subsequently repaid.But here the asset is in the possession of the borrower or his agent so the banker can repossess the vehicle and sell it only on the plea that there is an outstanding amount due on that.The loan documentation will be very clear as to when the Banker can repossess the vehicle.Can there be an omnibus clause in the Bank's loan documents giving such sweeping powers to the Bank to repossess?
I think the bank can be put on the back foot if the borrower were to confront the banker but will he given the fact that he has defaulted on his card payments?
