Legal Question in Banking Law in India

in good faith i stood borrower/coobligant with a office colleague in a personal loan from a govt bank. after few months principal borrower stopped making payments. i approached him on the request of bank official for payment of loan installments but all in vein. ultimately bank moved in court and i appeared in court and put my defence and principle borrower went ex parte. court sent salary attachment orders for both of us. i appealed in court and got stay for two months. later on i came to know it was a top up loan which was neither my colleague nor bank brought to my knowledge. principle borrowers salary has been attached and payment cheque has been sent to court. please advice my status as bank is not leaving since principle borrower has been attached. please advice me what should i do as i want to teach a lesson to my colleague who ditch me have no regrets. he has enjoyed entire loan and paying for half of it and if court/bank do not listen to my request i will have to pay half of loan.

this unfair and i want teach a lesson to the principle borrower. please guide me.


Asked on 9/27/13, 12:56 pm

1 Answer from Attorneys
Fca Prashant Chavan Expert Edge LLP

28.09.2013

Dear Sir / Madam,

You may inform the bank to exercise its full rights, and press further charges for recovery of the outstanding loan dues by acquiring the personal assets of the main borrower like car, house property, etc. Unless the main borrower is declared "insolvent", the bank is restrained from recovering any monies from the guarantor. But you should exercise caution, if you are the co-borrower, and not the guarantor of the loan, because if you are the co-borrower, you remain jointly responsible with the borrower for repayment of the loan.

Regards,

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Answered on 9/27/13, 9:47 pm


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