Person A took a loan from a bank with the help of the guarantors Person B and Person C. Person B is backed by a mortgage of his own property and he is not a relative of Person A. Person B died in 2016. Person C is A's mother, but her guarantee is not backed by any equitable mortgage. The loan became NPA in 2015, but the bank now in 2021, informing the successors of person B and saying that they will initiate SARFAESI.. The primary borrower i.e. person A hypothecated some govt work orders with the promise to route the payment through the loan account after completion of the works. But after completion of the works, person A using some unfair means, got paid the money in some other account than the loan account. Can this be regarded as fraud? What actions can be taken against the primary borrower for his such activity by the guarantor's successor? What should the guarantor's successor do now? The borrower did not route the money through the loan account, can it be regarded as breach of the agreement and the can the guarantor's successor withdraw his guarantee and security on this basis?
