Wrote on 27 October 2012
My point is that as the loan amount has been invested in business, the creditor is entitled to recover from Borrower through DRT. In case, the creditor intends to enforce the guarantee, it must be done through a Civil Court. Then, in Civil Court, the Guarantor will get full opportunity to defend his case as per law. Apart from the defences available to a principal borrower under the provisions of the Indian Contract Act, a surety or a guarantor is entitled to take additional defence. Such additional defence may be taken by the guarantor not only against the creditor but also against the principal debtor. He, in a given situation, would be entitled to show that the contract of guarantee has come to a not. Incidentally, if need arises, I CAN DRAFT SEVERAL SUCH DEFENCES as I have gained expertise in such matters. Regards
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Wrote on 11 October 2012
NOW I SAY that the Proceedings against the Guarantor in the DRT is ABSOLUTELY Illegal. DRT has no jurisdiction to proceed against the Guarantor as he has not taken any "debt", which he is to repay. Hon’ble Bombay High Court in Centurion Bank Ltd. vs Indian Lead Ltd. And Anr. {(2000) 100 Comp Cas 537 Bom ; (1999-3) 101 Bom LR 556; Decided on 20 August, 1999} has, inter alia, held as follows.
"19. It has been pointed out that defendant No. 2 is a guarantor against whom the suit is only for recovery of money. The suit against the guarantor is not a suit for recovery of debt but for enforcement of the guarantee." Regards
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Wrote on 30 June 2012
Liability of surety is NOT joint,BUT several and coextensive.Suing jointly results in a joint decree, which Bank enforces against BOTH, which is illegal, being in violation of s. 140.
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Wrote on 23 June 2012
The principal debtor and the guarantor can be sued jointly or severally in the absence of any specific provision as clarified by AP High Court in Ashok sharada vs. Small Industries Development Bank of India: 2007 (2) D.R.T.C 707 (AP)
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Wrote on 23 June 2012
Liability of surety is joint, several and coextensive and therefore in my opinion both the principal debtor and surety can be sued jointly.
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Wrote on 14 June 2012
In the contract were there is a guarantor the creditor/bank can raise their claim against the gurantor when it has exhaust all its remiedies. When the creditor /bank has not exhausted its remiedies
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Wrote on 14 June 2012
i.e matter is still pending in DRT then it can not claim against guarantor. Lets assume the DRT has passed an order against the principle debtor then proceedings against the gurantor will be null and void
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Wrote on 14 June 2012
but what about the hardship caused to him. I do not have direct judgement in this regard but I have judgements which says that the creditor can raise its claim against the guarantor only when all the remiedies are exhaust against priciple debtors.
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Wrote on 11 June 2012
sir,
creditor can proceed simultaneously for recovery from all ,whether it is debtor principal or surity. there is no citation or law opposing it.
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Wrote on 08 June 2012
It would not be appropriate to say this.The liability to repay the entire dues casts on both, borrower and guarantor. Moreover, there is no bar in law on proceeding simultanios. The courts have ruled in number of decisions.
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