Bijan Das 02 September 2021

What if borrower expired of a mudra loan.

Under MUDRA Loan if Borrower expired and the Bank has taken a someone as Guarantor against the same loan then will happen. What is the Legal remedies are available for Guarantor.

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2 Replies

Dr J C Vashista (Advocate) 03 September 2021

Guarantor is equally liable for recovery of all outstanding/ dues and Bank shall invoke recovery proceeding against guarantor who may move application for directions to issue summons to legal representatives of borrower.

Kevin Moses Paul 07 September 2021

As per your concern, let me inform you that section 128 of the Indian Contracts Act, 1872 deals with Surety's Liability. The section further states that - "The liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract".

For example:-
Ankit guarantees to Bhavya the payment of a bill of exchange by Chetan, the acceptor. The bill is dishonoured by Chetan. In such a situation Ankit will be held liable not only for the amount of the bill, but also for any interest and charges which may have become due on it.

Thus you shall be liable to make the payment for the loan. However, the basic liability depends upon the terms and conditions of the contract of guarantee which you entered into.

Regards,
Kevin M. Paul