Guarantors right
praveen
(Querist) 24 December 2014
This query is : Resolved
If the Guarantor pays some amount to the bank. If he has to make a claim on the property of principal borrower which is mortgaged to the same account(principal borrowers son who is trying to get it released under ots and sell it in open market).
what rights does the guarantor have on that property . which date is considered when the claim is made by guarantor. The date when the collateral guarantee is given or the date when the payment is made
to the bank. If the date of payment made is considered . The principal borrower has raised many loans after he raised the loan related to which the guarantor has paid the amount.
My Mother has given Guaranty (third party )to a collateral loan of her sister in laws Business(proprietary)(hp petrol bunk dealership)in2007.They have diverted the funds and ultimately the petrol bunk was seized by HPCL in 2009.Her son used to look after the business on her behalf.There were two properties involved in the loan one belongs Principal borrower, her son and daughter. And the other belongs to my mother. From initial day the principal borrower wanted our property to be exhausted and later he wanted to go for one time settlement.They wanted to squeeze large amounts from us. He continuously raised litigations on his property involving third parties.
Having no other go we had to give an offer to the bank to stop proceedings against our property and release our property from any claims. Bank has given us an offer which we have paid partially.
Later the bank has proceeded against the principal borrowers property and sold it for good price in e auction. The buyer has paid all amount and a sale certificate was issued. The buyer didn't get the property registered on his name.
Now the Principal borrower's son has filed an SA in DRT saying that Bank has colluded with the guarantor and auctioned their property. He wanted to pay 1.5 crores for the property which fetched 2.82 crores in the auction.
We have paid partial amount (40L)of the ots offer(1.08Cr). Bank has given six months time to pay that amount. 3 months without interest and 3 months with interest . Around 20 days are left.
We have given our offer letter because we didnt have any other choice to make.we are in dilemma not knowing what to do
ajay sethi
(Expert) 24 December 2014
academic query . state facts of your case
R.K Nanda
(Expert) 24 December 2014
academic query.
Guest
(Expert) 24 December 2014
Are you a guarantor or the debtor?
Also solution to your problem depends upon description of the real problem, if you have any.
prabhakar singh
(Expert) 24 December 2014
A guarantor will get invested with all the rights which the creditor had only “upon payment or performance of all that he is liable for”. A guarantor is liable for any payment or performance of any obligation only to the extent the principal debtor has defaulted.Under section 140 of the Indian Contract act Where a guaranteed debt has become due, or default of the principal debtor to perform a guaranteed duty has taken place, the surety upon payment or performance of all that he is liable for, is invested with all the rights which the creditor had against the principal debtor.
THEN u/section 141 A surety is entitled to the benefit of every security which the creditor has against the principal debtor at the time when the contract of suretyship entered into, whether the surety knows of the existence of such security or not; and if the creditor loses, or without the consent of the existence of such security or not; and if the creditor loses, or without the consent of the surety, parts with such security, the surety, the surety is discharged to the extent of the value of the security.
Rajendra K Goyal
(Expert) 24 December 2014
On payment of debt by guarantor he enters in the shoes of the lender. He has rights to initiate steps as lender would have taken.
T. Kalaiselvan, Advocate
(Expert) 25 December 2014
The crisp advise/opinion by expert Mr. Rajendra K Goyal goes a long way to explain the query in a proper way.
