Remedy to Guarantor
Associate R
(Querist) 09 December 2008
This query is : Resolved
Respected Experts,
Please guide me as to what is the remedy available to a Gurantor if any case is filed against him/her for recovery of loan amount in case of default by principal borrower?
Again what remedy is available to the Guarantor against the Principal Borrower if he defaults the payment?
Tribhuwan Pandey
(Expert) 09 December 2008
Under section 140 of the India Contract Act the guarantor is invested with all the rights which the creditor had against the principal debtor.
There is an implied promise to indemnify the surety.
He can file a suit for recovery against the Principal Borrower as a creditor.
Murali Krishna
(Expert) 09 December 2008
1.In default of principal borrower, as a guarantor you are liable to pay the amount. - Even if the principal borrower has the means of pay, still if he does not pay - defaults; you are liable
2. You have a remedy against the principal borrower by filing a case for recovery of the money.
Note: Find out, if the lender/bank made any deviations from the agreement, surity documents you have signed. If any such thing is done, there is possibility of your discharge from surity under Sec 134 -135-136 of Contract Act
