Sarafaesi action by bank against guarantor and remedies
4WhatIsRight
(Querist) 31 August 2018
This query is : Open
I had given guarantee for a loan taken by my friend.
Sensing my friends intention to default, I wrote to bank that I was Revoking the guarantee stating the reason.
Bank replied that it can't be done.
Post such communication, bank and my friend, forged guarantee extension from time to time.
Bank later allowed my friend to sell his property at throwaway price which didn't even cover bank's exposure, that is my friend owed a rupee to bank and bank allowed my friend to sell its only property for 60paise.
Then the remaining 40paise wasn't paid by my friend and it was turned into npa.
Bank personnel have also unofficially allowed my friend to take away all its plant and machinery as well as sell its stock, without even asking for a single penny to be deposited towards outstanding amount.
I filed a fir about fraud and forgery by bank personnel by manufacturing guarantee extension documents.
The court issued summons to bank official and my friend.
Now bank has initiated sarafaesi action and have issued publication in daily for sale of my property.
Lawyer says I have no remedy as guarantor and borrower are treated on equal footing and further the borrowing company has sold its fixed assets before being turned npa, so now the bank will sell your property to recover it's due. Criminal proceedings against bank official for fraud can't be any reason to get relief, as even if they are found guilty the court will punish them appropriately but it doesn't have any bearing on bank's recovery process.
Do I really don't have any remedy?
Guest
(Expert) 31 August 2018
No respite, if borrower fails to pay, you have to pay his outstanding amount, as a guarantor. Friendship demands some sacrifice on your part, as after all he was your friend.
It has been noticed, you always bring some controversial hypothetical problem, not being of yours real problem. How anyone can believe that your life is full of all sorts of legal problems, as your profile history brings forth.
Sudhir Kumar, Advocate
(Expert) 31 August 2018
Your lawyer is correct.
Come what may.
You are guarantor you have to pay.
each sunrise increases interest liability on you.
You can at the most file civil suit on your friend to cover the loss faced due to his default.
ashok kumar singh
(Expert) 31 August 2018
agree with views and opinion of experts, therefore no comments.
thanks
ashok kumar singh
advocate
4WhatIsRight
(Querist) 01 September 2018
Dear Dhingra Sir, thanks for sharing your view. With your good wishes and almighty's blessings I do not have any legal problem. I use this platform to help people in distress, by sharing your valued opinion with people in need of good advice.
4WhatIsRight
(Querist) 01 September 2018
Dear Sudhir Sir,
It is a psu bank and bank has filed few documents which it alleges to have been executed by me and my representatives. Upon learning about the same, I have lodged an FIR and court has taken up the matter on trial. Bank personnel have taken bail and have applied for quashing of FIR.
