Legal Question in Banking Law in India

Hi,

My husband has been put as guarantor for a personal loan of 6 lacs taken by his manager in 2006.The loan term is till 2011 . Later the manager went abroad and we also shifted places and jobs.We lost his contact. We had no idea that he did not repay to the bank. 4 years later when my husband applied for personal loan they called him to their office for dispersal of the loan. Once he met them they started forcing him and abusing him to pay up for the loan his manager took and accompanied him to home and took cheques for amount due. In these 4 years they never contacted him in his permanent address available with them. So we did not had a pinch of idea about this. The person who took loan is a owner of a flat in bangalore where we currently live. Also he is living in Singapore right now but we do not know his contact details. We tried to explain him the situation through mail but he is giving vague answers. He is well off and having good earning.

Now my question is as a guarantor, what leagl actions can we take against him and Do I have any right to occupy his flat legally till he pays back the money as we have already gave cheques to the bank. There is 5 more days time for the bank to present the cheques in the bank.

Please help. We are in no way in a position to pay up 6 lacs. Also the bank did not follow proper procedure of recovery. They never tried to contact us regarding this issue despite having our permanent address and current address also from past 3 years as we have their credit cards and savings account with the same bank.

In reference to this question i posted yesterday---

The borrower has replied to us saying he will pay off and settle the matter. Now once the due is cleared by the borrower to the bank, as the bank did not follow the proper procedure to recover money from us as a guarantor, what legal action can we take on bank for not following the procedures and also they lied to my husband that they will disburse the load he applied for and when he met them they started abusing him and forced him to sign the cheques. My husband is diabetic, he came under tremendous pressure. It came as a shock to him. I surely want to teach a lesson the bank guys. Please guide me.

Anticipating quick reply,

Thanks & Regards,

Sowmya.


Asked on 12/07/10, 2:23 am

1 Answer from Attorneys
J. Radhakrishnan independent Practice

you cannot occupy the defaulting borrower's flat. If your husband pays off the loan of the borrower to the Bank, he can step into the shoes of the bank and demand all securities given by the borrower to the bank to be handed over or transferred to your husband. Thereafter he can take action for recovery against the borrower.

If the borrower pays off the loan, it is good for your husband.. Your husband cannot take any action against the Bank when as a guarantor handed over his cheques to them. He has to blame himself for the mess.

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Answered on 12/10/10, 7:58 am


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