Cheque bounce as a guarantor
Sir my name is ramachandra, I given a blank ch as 2nd guarantee for my frnd in one of chit fund company in 2012. My frnd taken a chit amount of R's 2lkh( he paid rs 62500 for this chit) and in d same time only he puts another 3 chit of R's 5 lak in same company but he given a 3 name of their sister and his frnd and himself , rs 25000 ×3=75000 amountt he only paid for 1 month, thn he didn't continued tht chit and for rs 2lak chit also he didn't payed their balance.nw chit is cleared abt 2 yrs back. But nw my frnd is upstanding we don't knw whr is he, Now chit company is asking a money frm me otherwise they will take action in legally through my cheque. And they written a 173526 amount and presented to bank twice it's bounce due to insufficient fund, I went and met tht chit company and they told u came here pls pay any amount we can stop forwarding this case to next to level and I payed rs 10000 but nw they sent a notice to me on sterday pls pay full amount within 15 days otherwise we file compliant against u.
My question is hw can I solve this problem and there is any options to pay my part of amount ( we hav 3 member in this problem, they said tht my frnd has to pay rs 75000, in this amount my part of it rs 25000) if I paid this amount they will return my cheque and which I signed for document.
Pls give me a suggestion sir,
Asked in Criminal Law from Bengaluru, Karnataka
1) liability of principal debtor is co extensive with that of guarantor
2) since you have issue cheque as guarantor chit fund can deposit the cheque and recover money from you as principal debtor has failed to make payment
3) settle the issue with chit company and take back your cheque and document signed by you
4) you can sue the principal debtor and recover money paid by you to the chit fund
The liability of a guarantor is co-extensive with that of the borrower. Since you stood as a guarantor you are liable to repay the amount if it is not recoverable from the borrower. If they file a cheque bounce prosecution against you then it will be an uphill task for you to successfully defend yourself as there is a presumption that the cheque was issued for a legally dischargeable debt.
The chit company cannot file a case against you directly for cheating because you stood as a guarantor only.
If they threaten to file any cheque bounce case, ask them to proceed.
They will come out with false allegations agaisnt you but they cannot be able to prove it because you are the not the chit bidder and they cannot utilise your security cheque agaisnt you.
If at all they have any claim they can file civil money recovery suit agaisnt your brother by making you as a second defendant since you stood as guarantor.
So dont pay them any amount which will not be recorded and you will be trapped in for more liabilities.
Let them proceed legally which you can challenge when it comes for trial.