Legal Question in Banking Law in India
My dad gave surety to one of his friends who earns more money and also a government employee. As the borrower has shifted his place and not paying money for loan although he has not become physically incapable to earn money or dead, and he is in his job earning more money than my dad.But the bank has taken money form my father's account. They have not given any legal notice before. Can we sue the bank for doing so. And if yes how should we proceed.
5 Answers from Attorneys
The Bank has the right of set off even on the surety's account with the bank. Your father could sue only his friend for indemnity and not the bank.
You cannot sue bank but can sue his friend and recover the money from him.................Please check Sanjay Kalra and Associates on the internet to know more about our law firm and the legal services we are rendering for our clients from all over the World.
27.02.2013
Dear Sir / Madam,
(Jandrapet, Prakasam, Andhra Pradesh)
The bank has to recover its dues from the security offered by the borrower towards loan repayment. Only the shortfall amount of outstanding after all means of recovery from the borrower have been exhausted, can the bank ask the surety to pay up the balance shortfall.
You need to check whether your father has given an unconditional undertaking to the bank of recovery of the loan dues from your father, in the event of failure of the borrower to repay the loan. You cannot file a case against the bank, if that be the case.
Regards,
FCA Prashant Chavan
Mumbai
(You can also mail me for any further on-line advice at [email protected])
Being a guarantor your Dad is equally liable. No notice to Borrower is necessary to recover the amount from your Dad.
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