educational loan default

Hello sir, I am vinay from Tamil nandu, My wife took an educational loan for nursing studies by 2007 with her father as co-applicant and her mother as garantor. Interest of first 3 years is paid. For a principle amount of 300000 bank asking near about 500000 and the bank moved the matter to the court due to some irrugular due. Already we paid about 175000 and now we are ready to pay 250000. Importantly my wife is working saudi. In this case 1) applicant's father ( co-applicant) is available in India, will the court or bank force to ask the main applicant to report in India? 2) the bank manager personally threatening us that main applicant passport will be blocked? As the co-applicant and garantor available in India and ready to settle as a full amount, is there any need for the applicant to report at court. Will the court or the respective law or bank has any rights to block the applicant's passport on this case. 3) will the judge will recommend for a interest deduction? Please help, bank manager giving full stress to us. On be half of this our whole family is in an unpeaceful situation.