Yes that is correct.They will not issue you NOC if your IR has lapsed.And even if you'll get NOC without IR renewal,they may put you in problem when you come back to DGca for 737 endorsement.
I recommend if you get Noc from DGCa by chance without IR renewal then don't forget to do IR check abroad or in india before applying for 737 endorsement.
And then you can apply for both in DGCa(i.e IR renewal and 737 endorsement.)
Thanks.