Banking law and Indian Contract Act 1872
Virendra Singhal
(Querist) 26 February 2010
This query is : Resolved
Sir,
A first generation enterprenure had set up a factory by taking loan from IFCI and 2 PSBs.The Company defaulted in repayment of loan.IFCI alongwith 2 Banks moved Delhi High Court and took the entire secured assets of the Company and put it with Court receiver.No Insurance was taken by lenders,though agreed to by them.
Subsequently, the entire secured assets were lost while it was in the custody of court receiver.
Should the guarantors be not discharged under section 139 and 141 of the Indian Contract Act.
Pl. advise.
V.K.Singhal
Raj Kumar Makkad
(Expert) 26 February 2010
Loss of securities do not ipso facto give any benefit to the guarantors and they cannot be treated as discharged in the given facts.
Kumar Thadhani
(Expert) 28 February 2010
Yes guarantors are equally responible for the mortgage of secured loans and cannot be discharge.
Virendra Singhal
(Querist) 04 March 2010
Sir,
The main point which seems to have escaped your attention, is that the entire secured Assets were taken over by the lenders through Delhi High Court, but did not sell the same for a decade.Ultimately, these secured assets were stolen while they were in their custody.So, how can the guarantors be responsible for their negligence.
The lenders did not took the insurance cover for which they were exclusive responsible.
So, how can lender ask for recovery of loan amount from Guarantors, when they cannot return the secured assets to them, as on payment of full loan the guarantors whould step into the shoes of lender/creditors.
You may please reconsider yor reply as under these circumstances,guarantor/surety would be discharged u/s 139 and141 of Indian Contract Act.
Thanks,
V.K.Singhal
so, how can they seek recovery of due
Virendra Singhal
(Querist) 05 March 2010
Sir,
We are examining the issue as lawyers and NOT as Banker.If the bank has taken over the secured assets once in 1993 and did not sold for a decade i.e. upto 2003, when the promoters/guarantors came to know about the loss of these secured assets,bank will have to bare the loss,and even may have to compensate to the promoters for their negligence.It is not for guarantors to suffer due to severe negligenc of banks.
I would once again request you to examine and reply the legal position as lawyer and not as banker.
Infact IFCI has released the guarantors due to their negligence while banks with heavy money muscle, are haressing the guarantors in DRT and DRAT.
The attitude of DRT and DRAT is well known and everyone knows their softness towards banks and are not bothered about legality of the matter.Hence it is our utmost sincere duty to support the legal status of case and not get guided by bankers point of view.
Shall await your experts considered opinion in the matter.
Thanks,
V.K.Singhal
Virendra Singhal
(Querist) 15 October 2010
Please send my this query to Borrowers Rights Forum and send me their E.Mail i.d as well as their full address.My query is still unresolved.
V.K.Singhal
