ORDER : The petitioner is a registered partnership firm. Initially, at the time of registration on 12.02.2014, 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 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 dated 13.03.2020, 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 non-payment 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. 4. 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. 4. The case of the respondents Bank is that the fact of retirement of the existing partner-Yarram Rajasekhar Reddy and admission of new partner-G. Saideep and subsequent changes have not been intimated to the Bank; that since the vehicle was hypothecated to the Bank by partnership firm represented by Yarram Rajasekhar Reddy and Yarram Harika (as evident from copy of RC), it was the primary duty of the partners of the petitioner/firm to duly inform the same to the Bank; that the admission of new partner and retirement of the existing partner was on 19.12.2019, which was prior to the closure of loan account on 21.12.2019 and that the petitioner has not taken any steps in that direction. 5. It is stated by the Bank that both the partners viz., Yarram Harika and Yarram Rajasekhar Reddy stood as guarantors to AIIPL, for the credit facilities availed by the latter from Bank; that as the credit facilities have become irregular, the account of AIIPL has become NPA on 30.12.2019; that therefore, demand notice dated 10.02.2020 was issued to AIIPL and its guarantors, for paying the outstanding amount of Rs.2,87,33,436.20 ps. 6. Further, it is stated that as per the agreement of guarantee dated 03.09.2013, the partners of petitioner/firm have extended their personal guarantee to the loans availed by AIIPL; that both the entities are interlinked as per the valuation report given by the Bank panel valuer; that the value of immovable properties was not sufficient to recover the entire dues; that the Bank deals with public money and it is the primary duty of the Bank to recover all the dues from the borrower/guarantor; that therefore, the Bank has not issued NOC to the vehicle and advised the petitioner/firm to clear all dues of AIIPL. 7. It is finally stated therein that as per para 15 of the agreement of guarantee dated 24.03.2015, the Bank has lien over securities/goods, which are existing with the Bank and related to other accounts and in particular, the Bank has lien over the vehicle of the petitioner/firm, even though the loan account is closed. 8. Mr. 7. It is finally stated therein that as per para 15 of the agreement of guarantee dated 24.03.2015, the Bank has lien over securities/goods, which are existing with the Bank and related to other accounts and in particular, the Bank has lien over the vehicle of the petitioner/firm, even though the loan account is closed. 8. Mr. R. Guru Prasad, learned counsel for the petitioner contends that both the loan transactions are independent; that they cannot be linked on the premise that partners of petitioner/firm are Directors/Guarrantors of AIIPL, which had availed credit facilities from the Bank for its business; that AIIPL being a private limited company, the liability of AIIPL should not be extended to the personal properties of Directors/Guarrantors; that no such undertaking/agreement was entered between the petitioner/firm and the Bank at the time of granting loan and that the petitioner/firm is also not a sister concern of AIIPL. 9. In support of his submissions, learned counsel has relied on three decisions viz., Gurbax Rai and Ors. v. Punjab National Bank, New Delhi, AIR 1984 SC 1012 , M/s. Omega Cables Limited v. State Bank of India, W.P. Nos.5275, 5276 & 3419 of 2018, dated 10.06.2019 and Ramchandra Sahu and Anr. v. Kasem Khan and Anr., AIR 1925 Cal. 29. 10. Per contra, learned counsel for the respondents/Bank refuted the above contentions and reiterated the averments made in the counter-affidavit. 11. Heard both the learned counsel for the parties and perused the judgments cited by learned counsel for the petitioner and the material available on record. 12. In Gurbax Rai’s Case (1 supra), the issue involved was whether the amount (Rs.59,00,570.02 ps) recovered by the Bank from the insurer towards destruction of pledged goods, would have been adjusted by the bank towards payment of dues by partners of the firm under a separate loan account. The Supreme Court held as under : “The question is : is it open to the Bank which held pledged goods against the cash credit facility to adjust the amount recovered from the pledged goods for wiping out separate dues of the individual partners ? The goods were of the firm. They were not the goods of the partners. The goods were not offered as security for the individual debt of the partners. 13. The goods were of the firm. They were not the goods of the partners. The goods were not offered as security for the individual debt of the partners. 13. In M/s.Omega Cables Limited (2 supra), it was observed as under : “On a careful perusal of the provision, we find that Section 171 of Indian Contract Act, 1872, cannot be read isolated as it has certain lien over Section 148 of Indian Contract Act, 1872, which defines ‘Bailment’ as the delivery of goods by one person to another for some purpose, upon a contract that they shall when the purpose is accomplished, be returned or otherwise disposed of according to the direction of the person delivering them. … It is not in dispute that Subuthi and Indowind are two independent companies incorporated under the Companies Act, 1956. Each company is a separate and distinct legal entity and the mere fact that the two companies have common shareholders or common Board of Directors, will not make the two Companies a single entity. Nor will the existence of common shareholders or directors lead to an interference that one company will be bound by the acts of the other.” … This Court is of the view that bank cannot invoke and hold the securities of M/s.Omega Cables Limited for the loan secured by M/s. East Coast Construction and Industries Limited, under Section 171 of Indian Contract Act, 1872. Hence, Issue Nos.1 and 2 are held against the bank and in favour of M/s. Omega Cables Limited, the petitioner in W.P.Nos.5275 and 5276 of 2018.” 14. In Ramchandra Sahu (3 supra), the Calcutta High Court held as under : “15. It is thus clear that the ultimate use by a firm, of money borrowed by a partner individually on his own credit does not make the firm liable for the loan. The circumstance that the firm obtains the benefit of a transaction entered into by one of its members, as pointed out by Rolfe, B. in Beckham v. Drake (1841) 9 M. and W. 99 may show that he entered into the contract as the agent of the firm. The circumstance that the firm obtains the benefit of a transaction entered into by one of its members, as pointed out by Rolfe, B. in Beckham v. Drake (1841) 9 M. and W. 99 may show that he entered into the contract as the agent of the firm. But the fact is no more than evidence that this was the case: and the question upon which the liability or non-liability of the firm depends is not whether the firm obtained the benefit of the contract, but did the firm by one of its partners or otherwise enter into the contract…. 16….The principle was applied by the Supreme Court of Canada in Shaw v. Cadwell (1889) 17 Sup. Ct. Can. 357; there it was ruled that where one member of a partnership borrows money upon his own credit by giving his own promissory note for the sum so borrowed, and he afterwards uses the proceeds of the note in the partnership business, of his own free will, without being under any obligation to or contract with the lender so to do, the partnership is not liable for the loan…” 15. The judgment of a Division Bench of Madrash High Court, Madurai Bench, in M. Shanthi v. Bank of Baroda [W.P. (MD) No.12613 of 2016] relied on by the learned counsel for the petitioner has been stayed by the Hon’ble Supreme Court by the order dated 12.01.2018 in S.L.P. (Civil) Diary No(s).41844 of 2017. Hence, the judgment in M. Shanthi’s Case is not being considered by this Court. 16. Under Section 171 of the Indian Contract Act, 1872, the Bank has got right to exercise lien over the goods pledged to it. The subject vehicle is purchased by the petitioner/firm by availing loan from respondents/Bank. It is not in dispute that the entire loan amount had already been discharged. It is the case of the respondents/Bank that the partners of the petitioner/firm stood as guarantors for the loan obtained by AIIPL. The petitioner/firm is a separate entity and the vehicle under hypothecation does not belong to the partners of the petitioner/firm in individual capacity. It is not in dispute that the entire loan amount had already been discharged. It is the case of the respondents/Bank that the partners of the petitioner/firm stood as guarantors for the loan obtained by AIIPL. The petitioner/firm is a separate entity and the vehicle under hypothecation does not belong to the partners of the petitioner/firm in individual capacity. Merely because the partners of petitioner/firm stood as guarantors for the loan availed by AIIPL, which failed to repay the same, it cannot be said that the vehicle of the petitioner/firm can be kept on hold and NOC be denied to it on the premise that the Bank has right to exercise lien on the goods pledged to it under Section 171 of Contract Act until the loan availed by AIIPL is repaid. In the decisions cited supra, it is made clear that the loans taken by the partners in their individual capacity cannot be recovered by exercising lien on the goods of firm. The ratio laid down in Gurbax Rai’s case (Supra 1), M/s. Omega Cables Limited’s case (Supra 2), Ramchandra Sahu’s case (Supra 3) squarely applies to the instant case. 17. In view of the above, the Writ Petition allowed. Respondents/Bank is directed to issue NOC to the petitioner/firm in respect of Innova seven-seater vehicle bearing registration No. TS07 EQ799. There shall be no order as to costs. As a sequel, Miscellaneous Petitions, pending if any, stand disposed of.