Status of guarantor in recovery suit

I stood as a guarantor with personal guarantee in 2011 for a business who took term loan from XY bank. Business ran into trouble and promoters requested bank for more time and bank restructure the loan by converting accumulated interest into another term loan in 2014. Bank also took new personal guarantees from promoters and one old guarantor. I refused to give another guarantee and I did not give the new one at all. Now bank has filed for recovery in DRT and have included me also as party for recovery. What is my status in this? What remedy do I have please?

Answers (2)

150 votes

As you were the guarantor for the lonee for his loan granted by the Bank. You have not given the details regarding earlier loan in which you were guarantor in same loan A/C it has been renewed or that loan account has been closed after paying the amount. If the same account then you will be liable to pay the loan.

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224 votes

As per the guidelines the guarantor is equally responsible as borrower and it is the wish of the bank for selling which property first. But still you can move yourself to DRT & also to High Court for taking relief to the extent that the property of the borrower be put on auction at first instance.

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