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Jayanta (Service)     01 February 2013

Bank guarantee

My friend has given his consent to Bank as Guarantor for his relative's loan-Rs.1 Lakh. Now that relative is avoiding payment and bank has issued Notice to my Friend. Is there any viable option so that my friend can avoid his obligation. Bank is treatening for revenue proceedings / attachment.

Please guide me urgently.





 4 Replies

R.K Nanda (Advocate)     01 February 2013

ask ur relative to pay loan to bank.

1 Like

Dr. MPS RAMANI Ph.D.[Tech.] (Scientist/Engineer)     01 February 2013

There are no options other than what Advocate Nanda has stated. 

An alternative is that you pay up the creditor. You have the legal right to claim reimbursement from the original debtor. You can try that. Good luck.


If your relative does not pay the loan amount to the Bank, the same shall have to be paid by you. Pursuant to the loan amount having been cleared off, the bank shall issue NO dues certificate and you can ask for a Letter of subrogation the amount having been paid by you to the bank towards satisfaction of loan amount and on the basis of the same can sue your relative for repayment of loan.

1 Like


That there is no alternative for you than to pay up the creditor.

But if you repays the loan arrears to the creditor, in such circumstances you enters in to a shoe of creditor and then You have the legal right to claim reimbursement along with interest from the original debtor.

But before the repayment you may ask the bank for the account statement and loan papers, if there is any change in the terms and conditions mentioned in the loan sanction letter and the same is not communicated to you, then in such circumstances you can dispute the payment regarding the transactions carried after the change in the loan terms.

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