Guranty bond

Unless the liability is specifically stated (restricted), the liability may be unlimited.  Simply because the property value as stated in Market value column is Rs.3 lakhs, in case of exigency, recovery has to be made for entire property, and the liability to the company will be recovered from sale proceeds.

Please note that in guarantees the liability must be restricted specifically and if possible date of expiry of guarantee can also be stated.

First of all advice your relative to avoid such employer/employement....and also to show the bond to an able Labor Law Consultant /Service matters lawyer and understand the bond is created in lieu of what extra ordinary favor by the company e.g. some certified training from some certified Instt.... Has the company stated such favor in appointment letter/bond and the penalty/liquidated damages the company shall pay if it breaches the contract......? It should and make the contract equitable.... The employee and guarantor may submit written communication under proper acknowledgement describing its expectations from company.... and quite the reference of such letter in bond while signing it....so that there is some leverage....and later in case of breach you are in a position to withdraw... Advice your relative to be member of employees/trade unions...and retain access to an able Labor Law Consultant /Service matters lawyer

Once you sign as a guarantor on the basis of your property offered as  collateral security, in case of default in the later stage, the entire property will be taken for auction, and after fulfilling the defaulted amount, the balance if any will be given back to the guarantor/property owner. However, as observed by others, what is the need for a guarantor to give security to that extent ?, you may adhere to the suggestions made by Mr. Kumar Doab properly before taking a decision on the issue.

State the present market value of the property only for future safeguard of your legal interest. DON''T SIGN GUARANTEE /SECURITY BOND SUPPRESSING THE MATERIAL FACT..

It appears that there may be some fears that may be unfound.

Mr.Sai Kishan is not mortgaging any property but only stating the credit worthiness through a statement and guarantee bond states the maximum amount and interest specifically.

The value of property is only to see the creditworthiness and the value must  satisfy the organisation who accepts his guarantee.  It is only a general assessment.

In case of all guarantees, unless prior notice is issued , no institution can not  proceed legally.  So depending on value of his relationship and undersanding, Mr.Kishan may offer the guarantee and ignore the value of his assets for the present.