The bank can take action against a guarantor even if the borrower has pledged agricultural property, because a guarantor's liability is co-extensive with the borrower's. While the bank cannot typically use the SARFAESI Act to seize and auction the agricultural land pledged by the borrower, they can still pursue the guarantor for the outstanding loan amount through other legal means. The bank can initiate recovery proceedings against the guarantor's other assets or seek action through the Debt Recovery Tribunal (DRT). The bank can file a recovery case against both the borrower and the guarantor simultaneously. If the guarantor has other assets, such as other properties, shares, or bank accounts, the bank can seek to attach and sell these assets to recover the loan amount.If the guarantor has the means to pay but refuses to comply with the demand, the bank can treat the guarantor as a wilful defaulter. A guarantor can sue a borrower to recover the money they paid on the borrower's behalf. Once the guarantor pays the debt, they have the right to step into the creditor's shoes and sue the borrower for reimbursement. This right is typically protected by law, often through a legal principle called subrogation. 

Guarantor is liable for the lakh if applicant defaults 

Hi, I understand how concerning this situation must be for you and your father. When someone stands as a guarantor, it often feels like just a formality, but legally it carries serious obligations. Let’s look at this carefully and practically.

When your father signed as a guarantor, he legally undertook a co-extensive liability with the borrower under Section 128 of the Indian Contract Act. This means the bank can recover the outstanding dues from either the borrower or the guarantor—or both—depending on convenience. The DRT recognizes this principle, so your father could be treated as jointly and severally liable for the debt, even though he did not mortgage his own property.

However, since the loan was already secured against the borrower’s agricultural land and the bank holds the original documents, the bank’s first remedy is usually to proceed against the mortgaged property. They typically sell or auction the borrower’s secured asset to recover dues. The bank would approach your father’s personal assets only if the sale proceeds are insufficient to cover the outstanding loan.

That said, to protect your father, it’s important to act early. You can file a detailed reply or written statement in the DRT case through an advocate, clarifying that your father did not mortgage any of his own property and that the bank’s primary security is the borrower’s agricultural land. You can also request the Tribunal to direct the bank to first exhaust remedies against the secured asset before proceeding against the guarantor. While this request is at the discretion of the DRT, it often carries weight when supported by facts.

If the DRT passes any adverse order, your father can challenge it before the DRAT (Debt Recovery Appellate Tribunal) within the prescribed time. Also, ensure that no voluntary admission of liability or acknowledgment is made in writing without legal advice, as that could extend or strengthen the bank’s claim.

For now, gather all relevant documents—loan agreement, guarantee deed, correspondence with the bank, and the DRT notice—and consult a lawyer experienced in DRT matters. A precise, factual defense emphasizing that your father’s liability should arise only after the bank has realized the mortgaged property’s value can make a strong difference.

Liability of guarantor is co extensive with that of principal debtor 

2) your father is jointly liable to repay the loan 

3) don’t keep any property in father name 

4) seek phone consultation with any lawyer on this website 

1. The Bank can proceed against the Guarantor at any time to recover the loan .

2. If no security is given then first a recovery proceeding and then attachment of any property available with the Guarantor.

3. No but after recovery from Guarantor the Guarantor can initiate suit for recovery of the same amount from the borrower.

4. Talk to the borrower and force him to repay or settle the loan with the Bank. 

Your father’s position as guarantor in this mortgage loan recovery case before the Debt Recovery Tribunal (DRT) carries certain legal implications, but there are also strong safeguards available to protect him.

When your father signed as a guarantor, he agreed to a contract of guarantee under the Indian Contract Act. This means that if the borrower fails to repay the loan, the bank can hold your father equally responsible. However, since this loan was secured by the borrower’s own agricultural land, the bank must first recover the dues from that mortgaged property. Only if the proceeds from that sale are insufficient can the bank proceed against your father.

Your father’s personal property or income cannot be taken by the bank without following due legal process. The bank first needs a recovery order from the DRT. Once the DRT passes such an order, the Recovery Officer can proceed to attach property or accounts, but not before that. Since your father never mortgaged his own assets, those cannot be sold unless a specific DRT recovery order includes him.

Your father can contest or limit his liability on several grounds. He can insist that the bank must first exhaust recovery against the borrower’s mortgaged agricultural land. If the bank ever increased or modified the loan without his written consent, his guarantee for the altered terms is void. If there was any misrepresentation, lack of disclosure, or if his guarantee was taken without full understanding, those are also valid defences. Additionally, if there was a long delay by the bank in filing the DRT case, your lawyer can argue that the claim is time-barred.

You should immediately obtain a copy of the DRT application filed by the bank and review all the documents, particularly the guarantee deed. Engage an experienced DRT lawyer and file a written statement on your father’s behalf within the prescribed time, explaining that he did not pledge any property and that the bank must first recover from the secured land. Avoid signing any acknowledgment or fresh letter with the bank at this stage.

If the DRT later issues a recovery order, you can appeal to the Debt Recovery Appellate Tribunal (DRAT) within 30 days. You may also explore a one-time settlement with the bank after the borrower’s property is sold to prevent further proceedings against your father.

In summary, your father is only secondarily liable as guarantor, and the bank must first recover from the borrower’s mortgaged land. His personal property cannot be touched without a DRT order. A strong written defence before the DRT, combined with vigilance over the borrower’s asset sale, will fully protect his interests.

If you wish, I can prepare a detailed written statement draft for submission in the DRT, including all the legal defences available to your father.

1. As guarantor, your father is liable to pay the loan if the borrower defaults; the bank can proceed against him for repayment.

2. Yes, the bank/DRT can initiate action against your father's personal assets or income to recover the debt if the borrower’s collateral is insufficient or unavailable.

3. Liability can be contested only if the guarantee is conditional or limited in its terms; otherwise, guarantor’s liability is secondary but real.

4. Steps: Consult a lawyer immediately, review guarantee documents, negotiate with bank for settlement, and do not ignore recovery proceedings to avoid adverse orders.

1. Liability as Guarantor

Your father’s liability is co-extensive with the borrower under the Contract Act. The bank can recover the full loan amount from him if the borrower defaults, even though he didn’t get any benefit.

2. Risk to His Property

If DRT issues a Recovery Certificate, the Recovery Officer can attach or sell your father’s personal assets, salary, or bank accounts. The bank can proceed against both the mortgaged land and the guarantor simultaneously.

3. Grounds to Contest

You can limit or challenge liability if:

• The guarantee was signed under pressure or without proper consent.
• The loan terms were changed without his approval.
• The case is time-barred.
• The bank should first sell the borrower’s mortgaged land before touching the guarantor’s property (raise this as an equitable argument).

As a guarantor your father is equally responsible with the borrower in case of default in loan repayment 

The lender at its choice can independently follow either the borrower or guarantor 

Since your father has guaranteed the loan repayment by the borrower , in case of default by the borrower, the bank can pursue legal action against your father and his properties without taking any action against the borrower 

If the bank proceeds legally against the guarantor without taking any legal action against the borrower, and makes recoveries, then the guarantor can require the borrower to either reimburse the guarantor for the moneys paid by the guarantor to the bank towards loan discharge or require to restore his properties or make good it's value in the event the guarantor property is sold in any public auction to realize the dues of the lender 

1. In Indian Law, the liability of the guarantor is co-existent with that of the principal debtor. In case of dafault, the creditor can legally proceed against both simultaneously, without first exhausting all his legal rights against the principal debtor.

2. Yes, after the case is decided, at the time of execution.

3. Not much of a chance if that line of argument is taken.

4. Engage a competent lawyer to defend, on merits of the case.

1. Your father becomes liable to pay the outstanding amount in case you do not pay the dues. His personal properties get charged and his status is not equivalent to the borrower.

2. Yes, since he is also considered at par with the borrower, his properties can be charged by the Tribunal, if the original borrower fails to repay the dues.

3. Agricultural land can not be mortgaged for initiate SARFAESI proceeding for which it is a bad mortgage. In this case the properties of the Guarantor can be claimed for selling to recover the outstanding amount.

4. More details are required for providing proper advices. However, in case the loan has become NPA and the Bank has issued Demand Notice and Possession Notice under SARFAESI Act, you should file an application u/s17 of the Act with in 45 days from the date of receipt of the Possession Notice issued u/s13(4) of the Act by the Bank.

1. As per Section 128 of the Indian Contract Act, 1872 , a guarantor's liability is co-extensive with that of the debtor, unless otherwise provided under the contract. 

- Hence, your father is equally liable to pay the loan amount in the event of non-recover the said amount from the borrower 

2. Firstly the bank will recover the amount from  the property which is mortgaged with the bank 

3. Your father should appear before the Court to apprise the Court for the borrower property 

4. As above

Being a guarantor, your father is legally treated as equally liable for repayment if the borrower defaults. The bank can proceed against his personal property or income if the borrower’s collateral is insufficient. However, there are legal strategies to contest or limit liability, and timely representation before the DRT is essential. The best protection is active legal defence in the DRT proceedings, emphasising that the borrower’s secured land should be liquidated first, and exploring procedural or contractual defences to limit exposure.

Dear Client, when a person signs as a guarantor, the DRT treats the guarantor and borrower as equally liable, meaning your father can be asked to pay the entire outstanding amount if the borrower defaults; if he fails to pay, the bank can proceed against his personal assets, salary, pension, or bank accounts, even though he did not mortgage any property, because a guarantee creates personal financial liability beyond the borrower’s collateral. However, your father can contest liability by arguing that the bank must first exhaust the borrower’s agricultural land (the primary security), challenge procedural lapses, or claim that the guarantee was obtained without full disclosure or free consent. At this stage, the safest steps are: (1) immediately file a written statement/objection before DRT through a lawyer; (2) request the Tribunal to direct the bank to first realise the secured agricultural land; (3) seek a stay on coercive action against your father; and (4) obtain all loan and guarantee documents to evaluate any defence. I hope this answer helps. For any more queries, do not hesitate to contact us.