Legal Question in Banking Law in India

Dear Sir,

My father (Guarantor) and his colleague (Borrower) worked in Tamilnadu Highways Department. My father has signed in the COOP Society loan as a guarantor for the borrower on 2010. The borrower is absconding on 2011. But he didn't resign his job. He is in service (Loss of pay leave). His gratuity, gpf, leave salary and other benefits aren't claimed. My father died on 29.10.2014 . Now the bank send letter to the department for recover loan amount with interest in my father death benefits. The borrower still alive and in service but, he is absconding. This is for your kind information. Hence I request you to kindly let me know your advice. Thanks


Asked on 1/01/15, 11:02 pm

1 Answer from Attorneys
Fca Prashant Chavan Expert Edge LLP

03.01.2015

Dear Rajesh,

The borrower who was working for Tamil Nadu Highways Department (TNHD), and the loan availed by him from the bank are two separate issues. Since the borrower remains in service in the records of TNHD, the bank has to first recover the outstanding loan amount as on date from the retirement / terminal benefits of the borrower, and if there be any shortfall in recovery thereafter, the remaining amount of recovery will be made from you & your father's estate.

Regards,

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Answered on 1/02/15, 10:57 pm


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