Guarantor in car loan
Gaurav
(Querist) 26 December 2015
This query is : Resolved
I done a guarantee of my friend for his car loan from L& Finance & he paid 12 installments regularly but unfortunately he don't pay 1 installment & L&T take his car from his home & sell the same in auction on only Rs. 2,50,000/- without any intimation, but on that time the insurance value of the car is Rs. 5,00,000/-, now L&T file a case against him for paying balance amount with penalty & interest, at present my friend is no more & the court says you you fight the case with L&T finance.
Please suggest what i will do & how can i safe from this problem.
Isaac Gabriel
(Expert) 26 December 2015
The bank ought to to have informed about the sort sales and recovery of the balance amount. However, the guarantor id equally responsible for th edebt.
Rajendra K Goyal
(Expert) 26 December 2015
As a guarantor, you are liable to pay in case of default of the borrower.
SAINATH DEVALLA
(Expert) 27 December 2015
No bank or financial institution which has granted car loan will not auction it just for 1 installment default/clarify.
Advocate Bhartesh goyal
(Expert) 27 December 2015
Borrower and guarantor both are jointly and severally liable to repay the loan amount although in your case,you have defence that bank with ulterior motive auctioned the vehicle without informing borrower and guarantor also dispose of the said vehicle in its less price.
SAINATH DEVALLA
(Expert) 27 December 2015
As he has not replied to my question,I presume that the borrower has defaulted at least 6 instalments and hence the financer has gone for auction
Sudhir Kumar, Advocate
(Expert) 28 December 2015
I am not going into details as to how many instalements were defaulted.
(i) He is guaranty
(ii) lonee has vanished.
(iii) mortgaged property is auctioned.
(iv) Principal/Interest is not fully recovered
So he has to pay. His options are limited:-
(I) to pay without forcing bank to drag him to court - bank may even agree for some settlement.
(II) to litigate and let the amount keep gathering interests (may be cumulative) and later after losing the case pay a much heftier amount -- beneficial to the bank. If his is then not able to pay so much then even his own property may be attached and sold in auction and if salaried part of his salary may be attached.
As long as he does not pay he continues to be in hot list of CIBIL and himself will not get even a penny of loan from any bank.
HE HAS A RIGHT TO FIND HIS FRIEND (within limitation period) SUE THE FRIEND AND RECOVER HIS LOSS FROM HIM.
SAINATH DEVALLA
(Expert) 28 December 2015
Right conclusion by Adv Sudheerji
K.S.Srinivas
(Expert) 31 December 2015
I go with the Expert Sri Sudhir Kumar.
