Sir, I am C.Surya Narayana, Rajampeta, YSR Kadapa Dist, A.P. I gave a surety 5 years ago to my friend for Shriram Chits for Rs. 1 Lac and my friend is a govt. teacher and he failed to pay some installments. He absconded for his duties for the past 3 years and now he is doing his job and earned Rs. 35 Thousand/month. The Shriram Chits filed the suit in civil court, Rajampeta for above due amount of Rs. 55000/- and EP notice came from Civil court to me. I have tried to talk with both my friend and Shriram Chits Manager but no response. Please advise me to my problem. Thanking you sir.
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Since you had stood as guarantor of the loan you are liable for payment. Your only option is to chase your friend and ask him to repay the loan.
If he does not then you have to pay and thereafter you can file suit to recover the same from your frined.
This is the position in law which you can not avoid.
1)liability of principal debtor is co extensive with that of guarantor
2) you would be liable to pay Rs 55000 to chit company .
3) in the event you make payment you can take legal proceedings and recover amount paid by you from your friend
issue a legal notice to your friend and demand the payment which is required to pay to Shriram and if he is not ready to make the payment then you may file a civil suit against him before civil court and claim your money, you will have to pay the dues of your friend being a guarantor.
The liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract. So it can be enforced against the surety. You should have been very circumspect before standing as a surety. Now file your reply to the EP for which summons have been issued to you.
1. Since you had given sureties for your friend you have stepped in to the shoes of the Borrower as per law,
2. Hence, Shriram Chits Pvt Ltd. is with in its right to claim the defaulted loan amount from you,
3. If you are forced to pay the said amount as per Court Order, file a recovery suit against your friend claiming the said amount with interest, damage and cost.
The guarantor's liabilities are co-extensive with the principal borrower.
The Sriram chits are right in their action to recover the amount from you as the borrower defaulted the repayment.
If the money is recovered from you, you may subsequently file a money recovery suit against your friend on this basis.
