regarding the arbitation
PRAKASHCHANDRA MARU
(Querist) 13 April 2009
This query is : Resolved
hello respected all experts,
my client was became guarntaor in the bank and signed the all documentmeanwhile payment not done by the borrower so the vehicle recovered by the finance company and for the unpaid due amount rupees 60.0000/- they got order jointly against borrower and the gauarntor now execution petition [darkhast filed] by the company.
now question is that borrower is already died without any kind of the property and without any heirs he was unmarried now my client was paid half portion of the due amount whetere is it possible or not please infore me if yes then provide the judgements of that types.
A V Vishal
(Expert) 14 April 2009
The guarantor has to repay the loan to the full satisfaction of the debt. Refer the following section of the Indian Contract Act:
Contract of guarantee - A “contract of guarantee” is a contract to perform the promise, or discharge the liability, of a third person in case of his default. The person who gives the guarantee is called the “surety”; the person in respect of whose default the guarantee is given is called the “principal debtor”, and the person to whom the guarantee is given is called the “creditor”. A guarantee may be either oral or written. [section 126]. - - [Person giving guarantee is also called as ‘guarantor’. However, Contract Act uses the word ‘surety’ which is same as ‘guarantor’]. - - Three parties are involved in contract of guarantee. Contract between any two of them is not a ‘contract of guarantee’. It may be contract of indemnity. Primary liability is of the principal debtor. Liability of surety is secondary and arises when Principal Debtor fails to fulfill his commitments. However, this is so when surety gives guarantee at the request of principal debtor. If the surety gives guarantee on his own, then it will be contract of indemnity. In such case, surety has all primary liabilities.
Consideration for guarantee - Anything done, or any promise made, for the benefit of the principal debtor, may be sufficient consideration to the surety for giving the guarantee.
