Collateral security
Querist :
Anonymous
(Querist) 11 September 2011
This query is : Resolved
Hello All,
I need help in a collateral security case.My father who is about 73 yrs old pledged his self acquired property as collateral security 15 years back to get a business loan for one of his friends in business who in turn promised to repay the loan to the bank and get the collateral security released.But unfortunately my father's friend due to losses in business could not continue to operate the business and ignored to even bother about my father's collateral security leaving it at risk.Now after several years in 2006 the bank approached my father and informed him that they were auctioning his property for failing to repay the loan.My father now had to take loans and repay this to save his property from auction.I need help in recovering this money from my father's friend who took loan from the bank by pledging my father's property as collateral security.What do I need to do?.Please advise we are in huge debts.
Arun Kumar Bhagat
(Expert) 11 September 2011
Your father will have to file Money Suit against his friend.Since the friend is practically bankrupt, no fruitful result can be gained.Better pray to God to strengthen the financial capacity of friend so that he can give back them the same to your father.
M V Gupta
(Expert) 11 September 2011
While I agree with the views of Mr. Bhagat, I would suggest that your fahter should give a notice or letter of demand to his friend giving the particulars of the payment made by your father to obtain discharge of the loan.The relevant discharge certificate of the pledge/loan and payment receipts issued by the Bank may be preserved so that If and when the situation bceomes feasaible u will have sufficient documentary evidence to file suit for recovery of the amount.
prabhakar singh
(Expert) 11 September 2011
Agreeing with Mr. M V Gupta i wish to bring it in your notice that it is section 140 of the Indian Contract Act which provides you right to sue.
The section 140 reads"140. Rights of surety on payment or performance -
Where a guaranteed debt has become due, or default of the principal debtor to perform a guaranteed duty has taken place, the surety upon payment or performance of all that he is liable for, is invested with all the rights which the creditor had against the principal debtor."
This right to sue the principal debtor (friend of your father)is available exactly up to [3] three years from the date of payment of the loan outstanding made to the
Bank.Suit must be brought with in this time
and time must be counted very strictly as in the suit no con-donation of delay is allowed at any cost.
SO WHAT TO DO NOW:..
1)first check that bank has issued to your father certificate of deposit of the total outstanding of debt to gather with a discharge or not.If not collect it from bank without any more delay.
2)then send a notice of demand to the principal debtor forth with of the sum deposited within a time frame of 15 or 30 days failing which a suit of recovery shall be filled to gather with a claim of interest @ rate bank has charged on the loan amount to gather with all cost incurred in suit proceedings.
Preferably you are advised to take the help of a civil law lawyer for this purpose as the whole case to be filed would be based on this notice.
4)As soon as the time given in notice elapses file the suit without delay.
5)Try to know about properties of the principal debtor,if any traced,then in suit so filed ,move an application for attachment thereof
before the judgement so that decree when passed remains executable.
hope it guides you.
Querist :
Anonymous
(Querist) 12 September 2011
Hello All,
Thanks for the expert advice.I am going to contact a civil lawyer soon this week and take his help.In the mean time could any of you just give me an indication on how long it may take for us to get justice and also how we can speed up the case without any delay.Should I insist our lawyer to speed up the proceedings.
Regards
prabhakar singh
(Expert) 12 September 2011
if you prosecute diligently more particularly
in service of summons then 3 years at least.
