Legal Question in Banking Law in India
I have a House which a Friend of mine wants to pledge it for a loan for his business ( third party mortgage)
my questions are :- what will be my extent of liability in case of their default to pay interest and principal amount.
who is entitled to receive the loan amount,the firm or the owner of property, i:e me.
can I ask for a share in the loan amount and if it is transferred to my bank account from the company account ,will I be deemed as a debtor of the company ?any further precautions to be taken?I want to help him but don't wan't to land in trouble by doing so.learned experts please advice.
1 Answer from Attorneys
You cannot ask for a share in the loan. If your friend defaults in repayment, your property will b proceeded for recovery. Better don’t be a surety and don’t mortgage your property. If you have money sufficient enough and you want to help him you take proper security from him. Otherwise don’ t get into trouble by mortgaging your property for him to get loan.
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