Dear Experts,
I need your advice in a matter relating repayment of loan. In the present case, the borrower has borrowed money from the bank with the arrangement of repaying the loan in 3 years (36 monthly installments). Two suerty has signed the loan documents. Surety No. 1 is borrower's husband and Surety No. 2 is her colleague. The borrower made the payments for first 8 installments and missed the ninth installment. The bank, however, immediately recovered the 9 installment from Surety no. 2's Salary Account. Surety No. 2 has received no priot intimation from bank. Also the bank has not issued any notice to the principal borrower for the 9th installment being overdue. No corrospondence of whatsoever nature happened between the bank and principal borrower and Surety No. 1.
Is the bank correct to deduct the installment from Surety No. 2's salary without any corrospondence/ intimation?
Can the bank proceed for recovery of loan from the Sureties without declaring the principal borrower a 'willful defaulter'?
Also what is the liablity of Surety No. 1 in the case?
What are the options available to Surety No. 1 in this case? Kindly suggest the future course of action in the matter. Looking forward for your expert advice. Thank you.
Vijaykumar Iti
