Swapnaneel (Lecturer) 02 October 2021

loan guarantor

My father stood as a guarantor for a loan sanctioned to a firm, although my father was not a partner in the firm. The proprietor's mother also stood as a co-guarantor, but my father's guarantee was backed by his only residential property. My father died in 2016. Bank did not inform us about the loan till 2021. The primary borrower obtained the loan hypothecating work orders of govt contract jobs with a promise to route all the payments through the loan account. Now the primary borrower is not re-paying the loan though he, by some fraudulent ways, has got paid for some contract jobs. The property has been transferred to next of kins' name by mutation. How to defend so that the bank can not take our only residence? our financial condition is also not good.

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Dr J C Vashista (Advocate) 03 October 2021

Guarantor and/ or legal representative of guarantor are equally liable to pay outstanding loan.

Mortgaged property of principal borrower can not be transferred to any one (including his / her LRs) till mortgage is redeemed.

Advocate Bhartesh goyal (advocate) 03 October 2021

After sad demise of your father,you are liable to repay due loan amount and interest. How bank has transferred your house without your consent ,bank had to served you notice first.contact to local lawyer for necessary action

M V Gupta (Advocate) 03 October 2021

"The property has been transferred to next of kins name by mutation." Is it the primary borrower who has done this? Mutation cannot be effected in the municipal or revenue records without executing and registering a deed of transfer such as a gift deed. As regards your liability to discharge the bank loan, you will be bound by the guarantee given by your father. No escape from it.