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Position of guarantor under sarfaesi act

Page no : 2

Anjuru Chandra Sekhar (Advocate )     09 July 2015

It all depends on the value of the property.  You have not given the value of property.  If it is possible for you to surrender the portion of your uncle, talk to the banker to take possession of that portion first and if it satisfies to appropriate the loan amount, the banker will not touch your portion.  If your father did not sign as guarantor of the loan, he can maintain a civil suit.  However, the rule of estoppel will cause trouble because your father must have been alert and objected to giving the house as security in the beginning itself.  Therefore the best approach would be to approach the banker talk to him to wait till the partition suit comes to logical conclusion in civil court or file an interim application in Civil court to partition the property to such an extent in favour of your uncle that would satisfy the outstanding debt.  And keep the bank informed that such an IA is pending in civil court as soon as the Civil court allows the application, the bank would be ready to take possession of that part of property which the Civil court releases in the name of your uncle.

Anjuru Chandra Sekhar (Advocate )     09 July 2015

Or if you have money you can purchase that which is sold by banker yourself and possess the part of your uncle legally.  That means you will negotiate with bank saying, "you enter into private treaty with us, you possess the portion that belongs to my uncle and sell it to us".  There is a provision for private treaty under Enforcement of Security Interest Rules, 2002.

Anjuru Chandra Sekhar (Advocate )     04 August 2015

Section 13(11) of Sarfaesi Act.   Without prejudice to the rights conferred on the secured creditor under or by this section, the secured creditor shall be entitled to proceed against the guarantors or sell the pledged assets without first taking any of the measures specified in clauses (a)
to (d) of sub-section (4) in relation to the secur ed assets under this Act.
An authoritative pronouncement from Supreme Court is required to clarify that the words, "the secured creditor shall be entitled to proceed against the guarantors" are in relation to the pledged assets of the guarantor because the usage of word "or" gives an interpretation that "proceed against guarantors" and "sell the pledged assets" are two different subject matters. 

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