Liability of principal debtor is co extensive with of guarantor
2) bank is at liberty to proceed against principal debtor or guarantor or both
3) if your signatures are forged obtain hand writing expert opinion and file case against principal debtor
Forging of signature
After signing initial deed of guarantee as Guarantor, the Principal borrower had taken several revised sanction letters & executed multiple link agreements which are integral to deed of guarantee which are accepted by Bankers. the same was officially communicated to Bank after we came o know of signatures forgery. Now bank has issued notices under Surfaesi & is in process of physical possession of property which was given as collateral at time of initial guarantee. application is filed with DRT.. property of principal borrower is still untouched. email: [deleted]
Asked 4 years ago in Property Law
Religion: Hindu
11 Answers
out of total outstanding amount close to 40% has been recovered by Bank taking physical possession of the property, can still DRT deny stay when such forgery is brought to notice of Bank, DRT & also Police complaint has been filed as we know Bank has no emotions & only interested in Money
Asked 4 years ago
you can file application before DRT seek stay of auction of your property
take plea that signature are forged
enclose hand writing expert opinion
Guarantor is equally liable, bank can proceed directly against guarantor.
Date of signatures where forged and when FIR was filed is important to grant stay from DRT.
1. IF you are the adversely affected party in the matter, You can suo motto file a Police FIR, requesting investigation and charge-sheet, for offences like cheating, forgery, intimidation, fraud, breach of trust etc.... against the person (and can also include the Bank authorities, for abetment due to no action despite knowledge of forgery) , supported with all relevant supporting Documents & Witnesses.
2. IF the Police does not take action, THEN you can file private criminal case u/s 156(3) Cr.P.C., in the local Magistrates court, seeking directions to the Police to investigate and file charge sheet.
3. The above would atleast set the ball rolling, to a logical conclusion.
Dear Sir
You will have to contest case before DRT . in your reply take plea that signature has been forged . file application in DRT for referring matter to handwriting expert for his opinion .
also file police complaint about forgery against principal debtor
See DRT may provide you relief if there is forgery and there is mistake on part of the bank also, if DRT fails you can file appeal before DRAT seeking the relief.
“It is not necessary for the creditor, before proceeding against the surety, to request the principal debtor to pay, or to sue him, although solvent, unless this is expressly stipulated for.”
In Bank of Bihar Ltd. v. Damodar Prasad & Anr.[2], the Apex Court referred to a judgment in the case of Lachhman Joharimal v. Bapu Khandu and Tukaram Khandoji[3], in which the Division Bench of the Bombay High Court held-
“The court is of opinion that a creditor is not bound to exhaust his remedy against the principal debtor before suing the surety and that when a decree is obtained against a surety, it may be enforced in the same manner as a decree for any other debt.”
The Hon’ble Supreme Court of India has taken a similar view, in the case of Industrial Investment Bank of India Ltd. v. Biswanath Jhunjhunwala[4] had observed-
“The very object of the guarantee is defeated if the creditor is asked to postpone his remedies against the surety. In the present case the creditor is a banking company. A guarantee is a collateral security usually taken by a banker. The security will become useless if his rights against the surety can be so easily cut down.”
In State Bank of India v. M/s. Indexport Registered[5], the Apex Court held that the decree holder bank can execute the decree against the guarantor without proceeding against the principal borrower. Guarantor’s liability is co- extensive with that of the principal debtor.
However a guarantor to a loan can sue the principal debtor if he defaults and the guarantor had to pay on his behalf. In fact, as per section 145 of the Contract Act, there is an implied promise to indemnify the surety.
If you have approached DRT for stay of the operation of the proposed action by bank then you may have to await the decision because the settled laws say that the bank is at the liberty to attach the guarantor's proeprty also without proceeding against the principal borrower. Guarantor’s liability is co- extensive with that of the principal debtor.
If primafacie forgery is established then drt can give you some reliefs. But forgery need to be proved
The guarantor of a loan is liable if the debtor fails to clear it.
you shall have to prove that signature are fake.
You can also file suit seeking declaration and injunction against bank.
You should file application for stay on SURFAESI notice till pending investigation in case of forged signatures.
