Legal Question in Banking Law in India

I am from UP. My father kept residential house (registered in the name of my mother and father jointly) as security in the bank in the capacity of guaranteer. However, he ONLY signed and executed guarantee deed and my mother did not sign or did not provide the guarantee. Now my parents expired and the person who had taken the loan is not making payment to the bank. Total loan amount should be under Rs. 5.00 lacs. Bank (which is co-operative bank) is insisting us to deposit entire amount or otherwise asking to be ready to face the consequences. We are making hard follow up with the original borrower but no results. My question is - can bank go for auction of our residential house even if it was kept mortgaged by ONLY one person?


Asked on 1/28/11, 2:07 am

2 Answers from Attorneys
Manoj Lekhi Lekhi Associates Advocates

yes bank can ,because gurranter is also liable for default

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Answered on 1/28/11, 4:36 am
J. Radhakrishnan independent Practice

Since the house is in the name of your father and mother, the undivided half share of your mother is not subject to mortgage or guarantee. Regarding the half share of the father, the Bank can proceed against the same, notwithstanding the death of your father. If the borrower does not pay, make some arrangement to settle the loan and take over the documents from the Bank and then proceed against the borrower.

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Answered on 1/28/11, 6:39 pm


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