narendra.s.p (Chief Manager(Law)) 04 August 2013
I request for discussion on the following legal aspects:
1. Starting point for limitation period against a borrower of Bank Loan. Cash Credit Loan and Term loan.
What is the applicable article in the schedule of Limitation Act?
2. Third party mortgage : If the mortgagor to the Bank Loan is not taken as guarantor, Will the mortgage be defective for want of consideration.
narendra.s.p (Chief Manager(Law)) 04 August 2013
Sorry, I ment the Guarantor and not the Borrower.
Prasun Chandra Das (Banker) 21 August 2013
1) Limitation period for filing suit where the beneficiary of a guarantee is Govt/Govt body - 30 years from the expiry date of the guarantee; where the beneficiary of a guarantee is non-Govt body - 3 years from the expiry date of the guarantee.
Do not know the applicable article/section of the Limitation Act.
2) Most banks take personal guarantee of a mortgagor, where the mortgagor is not the borrower. I personally feel that it is not necessary. Most mortagages are Equitable Mortgages where the declaration cum cimfirmation deed states that "..I am depositing the title deeds towards securing the credit facility sanctioned to XXX..". So I dont think there should be any problem if PG is excluded. Whether this will hold in court or not is something I cannot comment on.
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