• Loan guarantor

Sir i happened to be a guaranter for one of my friends known person's personal loan whom i didnt knew much. but as my friend was also the guaranter for the same so i also agreed to become guaranter for that person in feb. 2014. the loan amount was 2 lakhs.
for about six months that person paid the emis properly but after that he continuosly failed to do so. for that i got calls from that financial group who gave personal loan about asking where is that guy, tell him to meet them, you will face problems etc.. but that person was out of reach... never at home......tried to call many time but he kept on changing mobile nos.... one day somehow we caught him and told that those people are troubling us and all.... then the matter was quit for some 7 or 8 months... but oneday again they called me that they where is that guy where are you we want to meet you. i met them they told me alll the problems that i was supposed to face like police case, property seal (i dont have any on my name), bad cibilk court case etc....
then again i contacted that person and informed all this and requested him to pay the money to the bank...
but after 15 days i got a call that my cheque will be deposited which was about 5 lakhs (my earning are less then 4 annually). my family was afraid of all this as was suspicious on me...
also they regularly started visiting my house, threatening AND ALL TACTICS...
i tried to meet that person told his parents all these problems told them to call me whnever he returns home (actually he come home everyday but when know one knows) but he never contacted me back.... i told his parents that i am facing problems.... but no rsults
now i have got a notice from them for repayment of the money and again they have mentioned in that notice to deposite the cheque......
i dont know how to come out of this trouble...
Asked 2 years ago in Civil Law from mumbai, Maharashtra
1) liability of principal debtor is co extensive with that of guarantor 

2) since your friend defaulted in payment of loan bank will proceed to recover loan both you and against your friend 

3) if you have given a cheque bank will deposit cheque and on dishonour of cheque of Rs 5 lakhs  proceed legally against you 

4) don't purchase any property in your name and don't keep any money in your bank account 
Ajay Sethi
Advocate, Mumbai
45485 Answers
2672 Consultations

5.0 on 5.0

Hi, as per law if the principal borrower has failed to pay the amount then  guarantor has to pay the amount.

2. Now the financial institution has harassing you so you can lodge a police complaint against financial institutions.

3. If they filed a case against you,  then you have no other options you have to contest the case on merits. 
Pradeep Bharathipura
Advocate, Bangalore
4551 Answers
203 Consultations

4.5 on 5.0

1) record the threats and lodge police complaint against recovery agents for criminal intimidation under section 506 of IPC 

2) your parents are not liable to pay your debts . The property owned by them cannot be attached for recovery of loan 

3) if you inherit any property bank can attach the property for recovery of loan 

4) bank will take legal proceedings against you ,  your friend and his father for loan recovery 
Ajay Sethi
Advocate, Mumbai
45485 Answers
2672 Consultations

5.0 on 5.0

1. The liability of a guarantor is co-extensive with that of the borrower. It was unwise in the first place to guarantee the repayment of loan unless you were sure that there will be no default made by the borrower. The bank/financial institution is free to proceed against the guarantor if the borrower does not repay it.

2. Now if a lawsuit for recovery of money is filed against you and the court summons you then contest the case on merits by arguing that the financial institution has dragged you in without taking all the necessary steps to trace the borrower and recover the unpaid loan from him. 

3. If they deposit your cheque, and it gets dishonoured, you can be criminally prosecuted for the offence of cheque bounce which carries an imprisonment of up to 2 years.
Ashish Davessar
Advocate, Jaipur
22977 Answers
634 Consultations

5.0 on 5.0

When the borrower defaults loan payment, the guarantor will be held liable for the principal as well as interest amount.
You said that your friend too was a guarantor for the same, what about his status?
If he was the first guarantor, then he will be held liable first, however you too shall be implicated in it.
The financial institute cannot use this type of pressurising tactics to recover loan, whatever they want to do they can do it through court.
They cannot go to police also against the guarantor.
If they threaten once again or ask you to deposit cheque, you may ask their particulars and issue them a legal notice warning them to not to indulge in such undesirable activities which are illegal and liable to be punished under criminal laws.
You can even lodge a police complaint against their excesses.
Consult a lawyer and design a legal notice to them.
T Kalaiselvan
Advocate, Vellore
35651 Answers
387 Consultations

5.0 on 5.0

whenever i meet his parents they say it is beyond there hand and all  
what are the other pptions available as i can not concentrate on my work because of this...
my wife and parents are threatened by recoverers regularly....but i can not do anything about that....
will my parents be in trouble as they have some property on there name which is not inherited to me or will i be in jail or something like that 
please guide
If the borrower is missing the co-applicant can be held liable.  The financial institute have to exhaust the liabilities of the co-applicant and the first guarantor and then only they can approach the 2nd guarantor i.e., you.
They are actually looking for easy way for recovery by trapping innocent people like you.
You should not be tensed stand up and face them, they will run away.
If you do not have any property on your name, nobody can do anything, they cannot put you in jail. 
at the maximum they can approach civil court for recovery suit, in that also you will be put as a third or fourth respondent only.
T Kalaiselvan
Advocate, Vellore
35651 Answers
387 Consultations

5.0 on 5.0

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