Chit funds: borrower absconding
yeteendra naidu
(Querist) 24 October 2013
This query is : Resolved
i am one of the guarantors for a chit
of one lakh along with my colleague/friend and his daughter.my friend's wife is the borrower and she happens to be a housewife without any income. her daughter is a software engineer.
the amount was paid to the borrower in the year 2011 and my friend expired in the year 2012. I have signed the document after my retirement in 2008 and I am a pensioner now.
Recently I received a notice from the chit company that they came to know that mother and daughter have left for USA and the burden of payment lies on me.They have filed a case for recovery. Please suggest ways to reach the borrower and her daughter staying in US.The Borrower before leaving the country told me that she sold a plot and got Rs.35 lakhs and sent me an email attaching a receipt stating that she has cleared about four chits by paying one lakh towards full settlement of her pending chits including the chit in which I am the guarantor. Later on inquiry the chit company said that the chit where I am involved has not been paid. Do not know if borrower and chit company are hand in glove. Please suggest some ways to reach and recover. When the borrower is well off and her daughter is earning a fat salary why should a pensioner who is senior citizen with a meager pension be targeted. Please show a way out.
Sudhir Kumar, Advocate
(Expert) 24 October 2013
It is you who have to pay (no exit)
You can later sue the successors (which is near impossible at least for you).
It is you who have to bring that widow from US to be witness to prove that the amount stands paid (which is nearly impossible at least for you).
Sudhir Kumar, Advocate
(Expert) 24 October 2013
You said :-
"When the borrower is well off and her daughter is earning a fat salary why should a pensioner who is senior citizen with a meager pension be targeted."
The reasons are simple:-
(i) you are a guarantor and you never stated that your retired status was disclosed to lender.
(ii) Borrower was your friend and you were onlooker to event that he died, his family sold entire estate in Indian and fled the country and became inapproachable to the lender.
(ii) even if successors are well off it is the choice of the lender whom to sue and they have decided to sue you which is easier option.
Sudhir Kumar, Advocate
(Expert) 24 October 2013
Someone may advise you that being pensioner you are protected from attachment. But it is only your pension which can be protected and not other property you may be having.
Sudhir Kumar, Advocate
(Expert) 24 October 2013
One alternative.
You can negotiate settlement with the lender which is possible only before you lose the suit.
P. Venu
(Expert) 24 October 2013
As the guarantor, you are liable. But the question is whether the liability still subsists in view of the communication from the borrower. Defend the matter on the basis of the e-mail communication from the borrower.
Is the borrower a party in the proceedings?
Devajyoti Barman
(Expert) 24 October 2013
You better file a case of cheating against the borrower.
That would give you relief for sometime.
Have you signed any agreement standing as guarantor?
If yes, then its contents needs to be seen to determine the extent of your liability in case of default of the borrower.
Rajendra K Goyal
(Expert) 24 October 2013
Guarantor is liable to pay in case of default of borrower.
malipeddi jaggarao
(Expert) 24 October 2013
The lender is free to go against the borrower/guarantors/one of the guarantors of his choice and hence you being the one of the guarantors are liable to pay the debt if it still exists. Your reasoning that the borrowers are well-off will not mitigate your vows. If you repay the liability you will have a right to reocver the money from the other guarantors/borrower/legal heirs.
The way is :
Since you have e-mail address contact the daughter and explain her the stand of chit fund company.
Get clarification from her and submit the same to the chit fund company.
If she agrees liability is still in existence, ask her to pay the liability and make you free of the episode.
It is not so difficult to get the phone number/contact number as the family is of your deceased friend's family and you must be knowing some body inner side who can help you.
Also look into the accounts of Chit Fund company whether the liability is still existing. Whether she has paid any money against this particular chit. If some paltry amount is left over and chit fund company applies interest, you can dispute the same with the company. Try to settle the matter amicably by involving both the daugther of your friend and the chitfund company.
Sudhir Kumar, Advocate
(Expert) 24 October 2013
read twice what Mr jaggarao said.
avoid litigation as you are on the receiving end.
You are having a defence of e-mail but you have no original receipt, no knowledge of what amount was paid, when was paid and also what interest has accumulated.
Be sue that the lady is not coming to India to be a witness.
Rajendra K Goyal
(Expert) 25 October 2013
As a guarantor these steps can be taken for his recovery(Legally enjoying position of lender if he pays) but primarily the liability of guarantor is equal in case of default of the borrower. The lender is liable to recover the money from the guarantor.
