Legal Question in Banking Law in India

I am from India. My father was signed as a guarantor to his friend 7 years ago. And his friend (the borrower) defaults the bank, and the bank sends notice to my father regarding payment of his friend's loan. But unfortunately my father died some months ago. So as a heir, do I need to pay the debt? Or should I take any legal action with a help of a lawyer to solve this problem? Or generally, what happens when the guarantor dies and the borrower defaults!!!


Asked on 10/22/16, 4:56 am

1 Answer from Attorneys
Fca Prashant Chavan Expert Edge LLP

22.10.2016

Dear Sir / Madam,

The borrower remains primarily liable to repay and settle the loan. The borrower is required to be declared insolvent in a court of law for the bank to pursue recovery of the loan from the guarantor. The wording of the Agreement as regards liability of the legal heirs of the guarantor to repay and settle the loan should be relied upon. Unless specifically mentioned in the Loan Agreement, the legal heir(s) of the guarantor are not liable to repay and settle the loan.

Regards,

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Answered on 10/22/16, 6:20 am


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