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Mohamed Shakeel (Proprietor)     11 January 2014

Guarantors right

Sir If a Guarantor takes remuneration from the Borrower for whom he has stood Guarantee, will it disqualify the Guarantors Indemnity Right



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 13 Replies

Ajit Singh Cheema (practising Advocate)     11 January 2014

No ,the contract of guarantee shall be separate contract.The taking of remuneration shall be an independent contract .  once the guarantor pay the liability of the borrower ,he can claim the amount from the principle.

Ajit Singh Cheema (practising Advocate)     11 January 2014

No ,the contract of guarantee shall be separate contract.The taking of remuneration shall be an independent contract .  once the guarantor pay the liability of the borrower ,he can claim the amount from the principle.

Ajit Singh Cheema (practising Advocate)     11 January 2014

No ,the contract of guarantee shall be separate contract.The taking of remuneration shall be an independent contract .  once the guarantor pay the liability of the borrower ,he can claim the amount from the principle.

Mohamed Shakeel (Proprietor)     11 January 2014

Sir I mean if the borrower makes an agreement with guarantor that he shall pay him some amount in return of the former staying guarantor for him. In such situation will the Guarantor's right to indemnify become void

Mohamed Shakeel (Proprietor)     11 January 2014

Sir I am asking this question because there are lots of business men in Kerala who take Bank Loans with third party Guarantee. In return they use to pay them considerable amount as remuneration per month. But when the borrower becomes bankrupt and the guarantor's secured assets are recovered by the Bank, they file case against the borrower invoking indemnity right. In this situation the borrower is a looser because, ultimately he is loosing his assets to the guarantor instead to the creditor. So my question is that the Amounts paid to the Guarantor as remuneration is deductable from his indemnity claim or not.

Ajit Singh Cheema (practising Advocate)     12 January 2014

Section 127 of contract Act  1872 .Consideration for Guarantee: Any thing done ,or any promise made,for the benefit of the principal debtor ,may be a sufficient consideration to the surety for giving the guarantee. your remuneration may be a part of consideration for guarantee.

Right Of subrogation (140).Right 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 he is liable for , is invested with all the rights which the creditor had against the principal debtor. Both the relevant sections are independent of each other .There should be no connection between the two sections.

Ajit Singh Cheema (practising Advocate)     12 January 2014

Section 127 of contract Act  1872 .Consideration for Guarantee: Any thing done ,or any promise made,for the benefit of the principal debtor ,may be a sufficient consideration to the surety for giving the guarantee. your remuneration may be a part of consideration for guarantee.

Right Of subrogation (140).Right 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 he is liable for , is invested with all the rights which the creditor had against the principal debtor. Both the relevant sections are independent of each other .There should be no connection between the two sections.

T. Kalaiselvan, Advocate (Advocate)     13 January 2014

Properly advised by learned Advocate Mr. Cheema, nothing more to add.

SHIRISH PAWAR, 7738990900 (Advocate)     15 January 2014

Rightly advised by Mr. Cheema with reference to section 127 and 140 of Indian Contract Act.

Kevin singh (Director)     16 March 2014

Respected Ajit ji, recently we opened joint saving account in ICICI bank with my mother as my mother is Widow, 61 years old and her medical conditions are not good so she can not go bank every time, she make me primary holder of joint account even when we opened a/c my mother gave the cheque of 12500 for open account and all are money of my mother. Yesterday they lien all amount from our account they give me reason my credit card payment is due from last 8 yrs which i don't! I have all the medical reports of my mother is going under treatment. I have a question Can a joint bank account between a mother and son be levied by a Icici bank when only the son is the debtor? What are the RBI rules for lien amount for joint a/c and what should we do to get my mother money back? Pls reply. Regards Pritpal Singh

S K KARNjhc (Legal Adviser)     19 April 2014

No more suggestions is required to put here, you are well advised by Advocate Mr Cheema sir.

Sunil S Nair (lawyer)     21 May 2014

Firstly a guarantor of any sort cannot claim consideration for standing as a guarantor on behalf of the borrower if it comes to light of the creditor he can frame charges against you and the borrower and the guarantor both shall be liable to pay fine with interest to the creditor and penal consequenses may also follow

Sunil S Nair (lawyer)     21 May 2014

Firstly a guarantor of any sort cannot claim consideration for standing as a guarantor on behalf of the borrower if it comes to light of the creditor he can frame charges against you and the borrower and the guarantor both shall be liable to pay fine with interest to the creditor and penal consequenses may also follow


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