Continuing gurantee

As and when the loan was renewed the bank would have taken acknowledgement of debt from borrower and guarantors... Can  you check and confirm this ? I can further advise you on seeing the copy of Guarantee Bond.

Sir , thank you for the response, kindly note that acknowledgement of the said debt is basically given by the company in their balence sheets,  also a loan renewal letter is granted by the company to the bank which was accepted by he bank. The said letter for the loan in question did not conatain the names of the said guarantors. Neither did the said gurantors acknowledge thier guarantee in any of the loan documnets. Till 2001 a  continuing guarantee agreement was entered by the said  guarantors with the Bank but thereafter no such continuing guarantee agreement was executed. In DRT the said ARC is trying to prove thier case against the gurantors vide the continuing gurantee agreement as executed in 2001. 

I repeat the present loan in question which has become NPA in the books of the Bank does not feature the said gurantors names. The present Gurantors are being dragged in vide the past continuing guranatee agreements as executed by them.

Regards,
Sagnik

Dear Sagnik,

Thanks  for your information.

As an ex banker, I wish to clarify the  things as under:

1. When ever a Demand Loan is sanctioned the Banker  takes Demand Promissory Note and Continuing Security letter to such DP Note. If the Advance is to a Corporate they also take guarantee of the directors in their individual capacity.

2. When there is default by the company, the properties of the company both movable and immovable are attached. If these are not sufficient the guarantees of the Directors in their personal capacity will be invoked. The bank will try to attach the personal properties of the guarantor directors.

3. When the loans are renewed the Bank takes Acceptance of the company and at the same time Acknowledgement of Debt of the balances due as of the previous date by the company directors and Guarantors shall be obtained.

4. When the loan sanctioned is a Term Loan, there will not be any DP Note. The Term Loan agreement will be comprehensive document.

5. I do not know what type of facilities were sanctioned by your banker.

6. As advised by my friend Expert Mr. Ajay Sethi, you can contact local Advocate. You can also be guided by the observations of Expert P S Dhingra in this regard for similar query under Experts Column of this Forum

Dear Mr. Sagnik,

As per the imformation provided by you, the guaranters in question can not be fastened with any liability by the ARC. F= If u r from Maharashtra or Mumbai u may contact Adv. Manish Bohade in this regard. He is a competent DRT lawyer. 

The contact no of Adv. Manish Bohade is - 09371505560 & his mail - m.bohade@rediffmail.com

Bank may invoke continuing guarantee for the present default of loan. During the later enhancement of loans if there are variations of the conditions, without the endorsement of such guarantors they may get absolved from the liability by contesting in DRT.

dear sir

please send the documetns

dr vesdula gopinath  advocate high court

m 09848227926

email  vgopinath2@yahoo.com

Dear experts,

Thank you for your suggestions, I will take the same to the management.  However I have one query, if we find any variation in the said loan which was included without consent of the said directors then can we file a quashing petition in he High Court to quash the said cases initiated against the guarantors by the ARC ?

Regards,

Sagnik Sanyal

Dear Sagnik,

Let your management decide in consulatation with your Advocate...

I can understand sir, but I have to give the management enough reasoning to make an informed decision. The directors involved are of a considerably progressive age & hence I wanted to quash the cases against them before they were asked to present themsleves for cross questioning, which I am given to understand is a general practice in the New Delhi, DRTs. However, variation in the terms of loan is not a mater of fact & is to be proven in court, hence perhaps quashing will not suceed.

I wish to perhaps ask the management to proceed with a writ petition if we succeed in finding enough grounds of the said variation. Am I correct in my reasoning ?

Dear Sagnik,

From this forum we can give you guidance in legal matters... However, as per the information provided by you we cannot give specific comments without looking into the papers... As suggested you can send the papers to Advocate Dr. Vedula Goinadh,

Dear Sagnik,

The HC would not entertain a quashing petition. The only forum to agitate all u r issues is DRT.