Read detailed legal questions and professional answers provided by experienced DRT lawyers to help users understand their consumer rights, legal remedies, and court procedures.
Question:
Can a guarantor also face recovery proceedings before the DRT?
Answer:
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Answer:
Yes. A guarantor can face recovery proceedings before the DRT where the claim falls within its jurisdiction. Under Section 128 of the Indian Contract Act, a guarantor’s liability generally extends to the same debt as the principal borrower’s liability, unless the guarantee contract provides otherwise. Signing a guarantee can therefore create substantial financial responsibility.
However, the scope of liability depends on the guarantee’s terms and the relevant facts. Any contractual limit, discharge of the guarantee or loss of securities may affect the claim. These issues require examination of the guarantee deed, loan documents and the bank’s conduct; liability should not be assumed solely from the amount stated in a recovery notice.