Allahabad High Court
MOHD. SALEEMversusSTATE OF U.P. AND 4 OTHERS
- Decided
Holding
The court held that the vehicle shall not be auctioned and shall be released to the petitioner upon his undertaking to pay Rs 15 lakh within 30 days, after which the loan will be rescheduled.
Summary
The petitioner, Mohd. Saleem, filed a writ petition under Article 226 seeking the release of his hypothecated vehicle seized by the respondent bank for default on loan EMIs. The bank argued that seizure was lawful due to the default. The petitioner offered to pay a lump sum of Rs 15,00,000 within 30 days and requested the vehicle’s release to enable him to earn and clear the dues. The bank consented to the payment but sought assurance that the vehicle would not be auctioned. The court directed the petitioner to furnish an undertaking to pay the amount within 30 days; upon receipt, the vehicle would be handed back, the loan rescheduled, and no coercive action would be taken provided the petitioner continues regular EMI payments. Failure to comply would allow the bank to proceed with legal measures and bar any further writ petitions.
Issues considered
- Whether the bank may lawfully retain or auction the hypothecated vehicle despite the petitioner's claim for release.
- Whether the petitioner is entitled to the vehicle’s release upon payment of a stipulated lump sum.
- Whether the court can condition the release of the vehicle on an undertaking and rescheduling of the loan.
Subjects
- Article 226
- writ petition
- vehicle loan
- hypothecation
- bank seizure
- loan rescheduling
- default
- court direction
Judgment
HIGH COURT OF JUDICATURE AT ALLAHABAD
WRIT - C No. - 6865 of 2026
Mohd. Saleem
.....Petitioner(s)
Versus
State Of U.P. And 4 Others
.....Respondent(s)
Counsel for Petitioner(s) : Damodar Singh, Devendra Vikram
Singh
Counsel for Respondent(s) : Abhishek Ahuja, Arpita Tarmali,
C.S.C., Sanjay Kumar Gupta
Court No. - 1
HON'BLE AJIT KUMAR, J.
HON'BLE INDRAJEET SHUKLA, J.
1. Heard Sri Devendra Vikram Singh, learned counsel appearing for the
petitioner and Sri Sanjay Kumar Gupta, learned counsel appearing for the
respondent-bank.
2. By means of this petition filed under Article 226 of the Constitution,
the petitioner has prayed for a direction to respondent no. 4 to release the
vehicle of the petitioner bearing Vehicle No. U.P. 95 AT 2601.
3. It is contended on behalf of the petitioner that the petitioner had taken
vehicle loan from the respondent-bank and the vehicle in question was
hypothicated, however due to some default in payment of dues towards
the EMIs of the vehicle loan advance, the vehicle has been taken away by
the respondents.
4. Per contra, it is argued by Sanjay Kumar Gupta, learned counsel
appearing for the respondents that the petitioner was in default of
payment of dues, therefore the respondent-bank had no other option but to
get the hypothicated vehicle seized.
5. At this stage, learned counsel for the petitioner submits that if the
vehicle is not released, he will not be able to pay back the dues and he is
ready to pay some lump sum amount towards the dues so that the
respondents may reschedule of the vehicle loan and in the meanwhile
vehicle may be released so that he may have earning to clear the dues.
WRIC No. 6865 of 2026
2
6. Learned counsel for the respondent-bank does not have any objection,
in the event, petitioner deposits Rs. 15,00,000/- within the next 30 days
time.
7. In view of the above, we dispose of this writ petition with the following
directions :
(i) The petitioner shall furnish an undertaking to the respondent no. 4
within 10 days from today that he would be paying Rs. 15,00,000/- within
30 days from today i.e. on or before 7th June, 2026.
(ii) In the event, the petitioner furnishes such an undertaking, the vehicle
of the petitioner shall not be auctioned and shall be retained by the bank
and shall be handed over to the petitioner upon deposit of Rs. 15,00,000/-
as directed hereinabove.
(iii) After receiving the payment of Rs.15,00,000/- as directed
hereinabove, the bank will reschedule the vehicle loan to regularize the
EMI and will furnish statement of account to the petitioner for payment of
regular EMIs and the petitioner would be thereafter regularly paying the
EMI without any fail.
(iv) In the event, the petitioner continues to pay the EMIs, the respondent-
bank will not take any coercive action against the petitioner. However, the
petitioner fails to pay the EMIs even after reschedulement, it will remain
open for the respondent-bank to proceed in accordance with law and no
second writ petition shall be entertained in the matter nor any time
extension application shall be entertained.
(Indrajeet Shukla,J.) (Ajit Kumar,J.)
May 6, 2026
Pratima
Digitally signed by :-
PRATIMA AGRAHARI
High Court of Judicature at Allahabad
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