anu 26 August 2022

NOC for one time settlement by NBFC

Sirs
please provide suggestions:
1.A person A has availed commercial 4 wheeler loan from an NBFC and the said case has been matured ,vehicle seized by the NBFC,sold and arbitration awarded expartie by the arbitration court.

2.Now the arbitration award has been sent to concerned court for Execution and the court has asked the respondent to try for out of court settlement with NBFC seeing adverse health condition of the respondent.

3.One time settlement amount of Rs 1.5 lakh has been mutually agreed to by the NBFC and the respondent.The amount has been deposited by the respondent to NBFC

4.Now the respondent asking for NOC but NBFC declining the same as another loan is outstanding on name of respondent for another vehicle (not filed in any court as of now).

5.The next date of hearing in Execution Petition is 4th November 2022.Can resplendent ask for courts interference for issuance of NOC as one time settlement amount has been paid.

6.Can the NBFC legally stop NOC of settled vehicle make for outstanding loan on another vehicle.

Your kind suggestions shall be highly solicited.

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3 Replies

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 ) 26 August 2022

NOC is the legal document issued by your lender, whether it is a bank or an NBFC, that you have no more dues to be paid. It is a document that clears you from any further obligation to the lender. So refused to give NOC.ckear all dues to get N OC

anu 26 August 2022

Sir dues have already been cleared for this particular case as one time settlement and NOC required for this particular case only.

LCI Thought Leader Adv. Ravish Bhatt, ADIT, CIOT (Dual Qualified lawyer/ Solicitor International Tax Affiliate CIOT) 26 August 2022

You cannot seek directions issued to the bank for issuing NOC from executing court. Getting such NOC for other purposes e.g. CIBIL record etc. could be through separate proceedings that may be initiated by you.

However, if your purpose is to close the executing petition only and if the fact of mutually agreed OTS amount is documented or reflected in writing anywhere e.g. emails etc, you need to produce the same before executing court along with proof of payment made for that purpose.

In a likely event, if you did not, in writing state about appropriating the payment towards a specific debt at the time of making payment, bank could contend that it approrpriated towards other debt and this one is still outsanding. But in that case, you could show the circumstances pointing to payment of this debt (Which according to you is discharged) only.