Legal Question in Banking Law in India

My father is one of the two guarantors for a cash credit loan that a relative had taken a in 2001. Loan was taken against co-lateral security of the home of the borrower from a co-operative bank. Borrower died in early 2007. After that, son of the borrower has not made any payments. Couple of other notes:

(1) Renewal of the loan was never done.

(2) As per the co-operative bank's rules and regulations, suit should have been filed within 2 years of the death of the borrower in case of non-repayment. But that has not been done by the bank.

Now, the bank people are harassing my father (and the other guarantor) about repayment of the loan. What is his liability in this case? Bank can not say that they were not aware of the death, since they have already sent notices to the son of the borrower.


Asked on 12/31/09, 8:50 am

2 Answers from Attorneys
Sudershan Goel India Law Offices of Sudershan Goel - Advocate

If value of collateral security is sufficient to cover bank's dues, there is nothing for you people to worry about. You may ask the bank to first dispose of the collateral security under SECURITIZATION ACT before resorting recovery proceedings against guarantors.

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Answered on 12/31/09, 5:24 pm
Pravin Vaidya Independent

PLEASE E-MAIL/MAIL COPIES OF LOAN DOCUMENTS EXECUTED BY BORROWER & GUARANTORS ALONG WITH THE COPIES OF BANK'S NOTICE, LEGAL NOTICE ETC. TO ENABLE ME TO GIVE CORRECT OPNION.PROFESSIONAL CHARGES WILL APPLY

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Answered on 1/02/10, 3:21 pm


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