Surety against loan
Adv. MUKESH CHAUHAN
(Querist) 13 May 2015
This query is : Resolved
'A' borrowed Rs. 50,000/- as loan from bank under PMRY scheme in September 2004. "B" stood surety for 'A's loan. 'A' bought some musical instrument and started his business. But business failed at inception and 'A' stopped repayment of loan after paying first three installments. Bank officials did nothing i.e. they did not confiscated musical instruments to protect the loan amount. In the meantime, 'A' sold instruments and misappropriated the money. Almost upto August 2014 bank did not take any action to recover the loan from brower. In august 2014 legal notice served to surety to repay the loan amount with interet i.e. Rs. 85,000/-. And then in October 2014 bank filed recover suit in the court.
In the above said period of 10 years, surety never signed any document.
My queries are as follows :
1. Is the suit is maintenable under Limitation Act ?
2. Can bank file recover suit after ten years of loan default.
3. From which point cause of action arises? from the first default by borrower or from the date legal notice issued to borrower & surety.
4. what is the remedy for surety ?
Hemant Agarwal
(Expert) 13 May 2015
1. Since the Bank served notice only after 10 years, ANY recovery of loan amount is now barred, against the borrower and/or surety.
Keep Smiling .... Hemant Agarwal
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Hemant Agarwal
(Expert) 13 May 2015
1. Since the Bank served notice only after 10 years, ANY recovery of loan amount is now barred, against the borrower and/or surety.
Keep Smiling .... Hemant Agarwal
READ ARTICLES ON: http://hemantagarwal21.blogspot.in/?view=sidebar
ADV-JEEVAN PATIL, MUMBAI
(Expert) 13 May 2015
Surety has obligation to repay laon but if barred by limitation defend pressing limitations Act
Rajendra K Goyal
(Expert) 14 May 2015
If loan barred by limitation, loan can not be recovered. There may be revival of the loan from original borrower to extend the limitation. To take defense of limitation. all documents need to be scrutinized, however on the face it seems time barred loan.
T. Kalaiselvan, Advocate
(Expert) 16 May 2015
It is to be seen from the plaint that how surety has been made responsible for repayment when no action was taken against the borrower, also the limitation period can also be found in the plaint of the suit, what is your lawyer's opinion in this regard.
