ABC has taken loan from a bank with guarantee of XYZ, ABC defaulted in repayment of loan and the bank wants to recall the dues by serving notice under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act.2002. XYZ is also a partner in one of the firms which is also availing some credit facilities. The accounts of the firm are regular. As such , if the bank proceeds against ABC under SARFAESI Act and issues recall notice to it with notice to XYZ being the guarantor, whether the loans of the firm in which XYZ is partner should also be recalled to determine his liability or the loan of the firm can also be recalled later in case of need .
1 Answer from Attorneys
Dear Sir / Madam,
No. The loans of the firm in which XYZ is a partner cannot be recalled to determine his liability simply because the accounts of the firm being regular, it in no way has defaulted on any terms and conditions of repayment.
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