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. 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.

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.

Please guide us. Anticipating quick reply,

Thanks & Regards,

Sowmya.


Asked on 12/06/10, 5:05 am

2 Answers from Attorneys
Vishwa Arya Arya & Co.

You are too late in the day. the bank has actually played very clever upon you. in fact the debt had become time barred even for the actual borrower what to talk of the guarantor. If none of the cheque has yet been encashed you may stop the payment and contest it on the ground of no liability. Secondly, the supreme court says that the bank has to exhaust its remedies against the borrower first and not the guarantor. At the most bank could attach the house where in you live if it is in the name of the borrower.

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Answered on 12/06/10, 6:38 am
Vishwa Arya Arya & Co.

In furterance to my response, yes, you will have a right of recovery against the borrower.

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Answered on 12/06/10, 6:39 am


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