Guarantor for bank loan died. will it absolve the liability?

Querist : Anonymous (Querist) 24 July 2020 This query is : Resolved
husband (76 years) and wife (71 years) stood as guarantors for bank loan of 50 crores which became NPA. 2.5 acres of husband and 12.5 acres of wife were given as guarantee for bank loan. Since the loan became NPA 5 years back there was pressure on both guarantors for repayment of loan along with the borrower. few days back wife died. will the 12.5 acres given by wife as guarantee for bank loan will be free since she died ?

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Dr J C Vashista (Expert) 25 July 2020
The 12.5 acres land (estate left behind by deceased) of the guarentor is already mortgaged against the loan and the Bank shall recover the amount outstanding from estate of borrower and guarentor.

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P. Venu (Expert) 25 July 2020
Had the Bank taken any steps to evoke the guarantee and realise the NPA?

SHIRISH PAWAR, 7738990900 (Expert) 25 July 2020
Hello,

If wife mortgage 12.5 acres of land in that case bank will recover the amount by attaching and selling land.

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R.Ranganathan (Expert) 25 July 2020
The loan is provided by the mortgaging of the property of the guarantor. So as long as the property is available the mortgagee can recover the loan from and out of the proceeds of the property.

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Sudhir Kumar, Advocate (Expert) 25 July 2020
whole loan can be recovered from the available guarantor.

You may better refer to the terms of the loan.

Rajendra K Goyal (Expert) 25 July 2020
Guarantors and the borrower are / were jointly and severely liable to pay the loan back. If the guarantor expires, loan can be recovered from his assets. In this case the land was mortgaged, Bank has right to recover from this property. Borrower and another guarantor also remain liable.

Bank would proceed to recover from easier avenue.

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Guarantor for bank loan died. will it absolve the liability?

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