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Q.Is Guarantor liable for banker fraud
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Q. Is Guarantor liable for banker fraud

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Anonymous

posted 4 months ago

Sir, my uncle stood as a guarantor for a bank loan in nationalized bank and given security collateral for the loan. Borrower is my uncle relative. The borrower and bank manager joined together and made collusion in the loan transaction. Bank manager received bribe from borrower and given adhoc facility by 200% without any superior approval. Bank manager personally given more money. Borrower escaped few years back and account declared as NPA. Later the bank made a complaint in CBI and the bank manager was dismissed from his role. Few months back the CBI court given judgement and convicted both Manager and borrower for a years with huge amount as penalty. In this situation my uncle guarantee still valid? Many of my friends told that the Guarantor is not liable for colluded transaction.he must be discharged from the liability.. Please advise. There are so many judgement given in favour of guarantor for same scenario by different Indian courts. Please help. Thanks
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A. From bank's perspective, the guarantor is treated as good as the borrower. Hence, it is the responsibility of the guarantor to clear the loan. In case the said guarantor refuses to comply with the demand made by the creditor/banker, despite having sufficient means to make payment of the dues, such guarantor would also be treated as a wilful defaulter. Refer to the notification of the RBI dated September 9, 2014 and SC judgement justices BS Chauhan and Dipak Misra 2012.

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ROBERT D ROZARIO

Experience: 15 Year(s)

Responded 4 months ago

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Anonymous

Replied 4 months ago

Dear Sir, Thanks for your valuable response on my query. still i have a doubt on this. kindly clarify more on this.
1. My uncle was a guarantor only for the loan and not at all related for that business.

2. Loan sanctioned 30 lacs initially, later with in 1 month period, bank manager given adhoc facilty at 75 lacs without superior approval.

3. presently we run this case in DRT. more over, the bank already collected that 30 lacs through auctioning borrower property. banker claiming my uncle property for that extra 45 lacs which is given by the bank manager without higher authority approval. bank manager received bribe and sanctioned that extra amount. This is as per CBI court judgement.

4. More over, we have submitted in the DRT worth about 20 lacs payment details which is to be received from that company clients. banker would not take any steps to collect that amount.

5. I can agree, if borrower is failed to pay the loan then guarantor will act and primary responsibility to pay the loan. In this situation, the borrower and banker collusion and made loss to the bank. Is the guarantor also responsible for their fraud transaction? How the guarantor protects from law for such scenario?

kindly advice. Thanks in Advance.

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ROBERT D ROZARIO

Experience: 15 Year(s)

Replied 4 months ago

don't pay anything which was not approved without your uncle's knowledge. In your uncle's situation, your uncle was the guarantor for the INR 30 lacs only. Your uncle will not be liable for anything above INR 30 lacs which wasn't approved without his knowledge. You just need to find out whether your uncle had been a guarantor for anything above INR 30 lacs. If not and since INR 30 lacs had already been recovered by the creditor, your uncle is absolved from any further liabilities. Call me for discussion.

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A. No. Contest the case hotly.

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Anonymous

Replied 4 months ago

i cant understand sir. i will brief again here.

Dear Sir, Thanks for your valuable response on my query. still i have a doubt on this. kindly clarify more on this.
1. My uncle was a guarantor only for the loan and not at all related for that business.

2. Loan sanctioned 30 lacs initially, later with in 1 month period, bank manager given adhoc facilty at 75 lacs without superior approval.

3. presently we run this case in DRT. more over, the bank already collected that 30 lacs through auctioning borrower property. banker claiming my uncle property for that extra 45 lacs which is given by the bank manager without higher authority approval. bank manager received bribe and sanctioned that extra amount. This is as per CBI court judgement.

4. More over, we have submitted in the DRT worth about 20 lacs payment details which is to be received from that company clients. banker would not take any steps to collect that amount.

5. I can agree, if borrower is failed to pay the loan then guarantor will act and primary responsibility to pay the loan. In this situation, the borrower and banker collusion and made loss to the bank. Is the guarantor also responsible for their fraud transaction? How the guarantor protects from law for such scenario?

kindly advice. Thanks in Advance.

Reply

A. Dear Sir,
It is difficult to say without knowing the full story and that too when CBI is involved.
In principle Guarantor is not supposed to be involved in in fraudulent transactions.
I wish he should have been more careful.
Shanti Ranjan Behera
Advocate

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Shanti Ranjan Behera

Experience: 22 Year(s)

Responded 4 months ago

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Anonymous

Replied 4 months ago

Dear Sir, Thanks for your valuable response on my query. still i have a doubt on this. kindly clarify more on this.
1. My uncle was a guarantor only for the loan and not at all related for that business.

2. Loan sanctioned 30 lacs initially, later with in 1 month period, bank manager given adhoc facilty at 75 lacs without superior approval.

3. presently we run this case in DRT. more over, the bank already collected that 30 lacs through auctioning borrower property. banker claiming my uncle property for that extra 45 lacs which is given by the bank manager without higher authority approval. bank manager received bribe and sanctioned that extra amount. This is as per CBI court judgement.

4. More over, we have submitted in the DRT worth about 20 lacs payment details which is to be received from that company clients. banker would not take any steps to collect that amount.

5. I can agree, if borrower is failed to pay the loan then guarantor will act and primary responsibility to pay the loan. In this situation, the borrower and banker joined together done collusion transaction and made loss to the bank. Is the guarantor also responsible for their fraud transaction? How the guarantor protects from law for such scenario?

kindly advice. Thanks in Advance.

Reply

A. Ur uncle can made application to the concerne bank for replying his guarantee. Or remove me as as guarantor .

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Rameshwar Dadhe

Experience: 2 Year(s)

Responded 4 months ago

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Anonymous

Replied 4 months ago

i cant get clear answer sir. Dear Sir, Thanks for your valuable response on my query. still i have a doubt on this. kindly clarify more on this.
1. My uncle was a guarantor only for the loan and not at all related for that business.

2. Loan sanctioned 30 lacs initially, later with in 1 month period, bank manager given adhoc facilty at 75 lacs without superior approval.

3. presently we run this case in DRT. more over, the bank already collected that 30 lacs through auctioning borrower property. banker claiming my uncle property for that extra 45 lacs which is given by the bank manager without higher authority approval. bank manager received bribe and sanctioned that extra amount. This is as per CBI court judgement.

4. More over, we have submitted in the DRT worth about 20 lacs payment details which is to be received from that company clients. banker would not take any steps to collect that amount.

5. I can agree, if borrower is failed to pay the loan then guarantor will act and primary responsibility to pay the loan. In this situation, the borrower and banker joined together done collusion transaction and made loss to the bank. Is the guarantor also responsible for their fraud transaction? How the guarantor protects from law for such scenario?

kindly advice. Thanks in Advance.

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Rameshwar Dadhe

Experience: 2 Year(s)

Replied 4 months ago

Ur uncle can file application for revocation of guarantor. For breach of trust or breach of contract

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