Legal Question in Banking Law in India
I was guarantor of a person X for a commercial vehicle loan in 2007 for tenure of four years. Person X was well known to me and installments were up-to-date till he was alive. On default in payments after X death in 2009, financier seized the vehicle. Subsequently X�s son Y approached financier and got the vehicle released being the legal heir of the vehicle. Financier neither informed me nor took my approval to release the vehicle to Y who was quiet unknown to me. Y took the vehicle and absconded from the place to his native place/house in a different city and state with no clue on his whereabouts. After a long time (somewhere around 2011) on default in payments, financier approached me because they couldn't locate the vehicle. I somehow helped financier to trace the vehicle and person Y, (X's son). After that how financier dealt with him I don't know. Again after a long time (In 2012) financier approached me with a huge out standings. The vehicle is still being used by Y at the same location and financier local office is also aware of it. I approached financier and asked why they're harassing me, the person X to whom I was the guarantor has died, he was well known to me, and why didn�t they seize and sell off the vehicle when they had all information of X death. How could Y use the vehicle for such a long time without paying installments which turned out in a huge out standings? What they are doing even after all information of Y and the vehicle since long. Financier showed me some clauses of agreements, all in his favor. What can I do now?
4 Answers from Attorneys
You can complain to the police and RBI of t he harassment. since the financier aft Er seizing the vehicle released it,to Y, without your consent you plead discharge from liability as per Sec.139 of the Contract Act.
Claim of Financial Institution is time barred. And cannot be enforced against you, as they failed to initiate any action within 3 years of the demise of the original borrower.
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