The liability of principal dentures is co extensive with that of guarantor
bank can proceed against principal debtor or guarantor to recover the loan amount
you can sue the principal debtor to recover loan amount paid by you
Bank guarantor problem
Sir My father in law is 60 years old pensioner. he was an guarantor of a loanee. after failure to repay loan by loanee, bank deducted his pension amount and blocked the account and not able to live my life peace fully with daily needs with out monthly pension amount. while no action is taken to loanee. he is living peacefully with his lot of assets. Any option to get my pension? and the debited amount from back. Nature of Lone : Term Loan, Cash credit loan and E-delayer finance loan. please suggest us how to come out of this issues
Asked 2 years ago in Consumer Law
First answer received in 10 minutes.
Lawyers are available now to answer your questions.
10 Answers
Typo in error in above question "not able to live his life peace fully with daily needs with out monthly pension amount"
Asked 2 years ago
Act as mentioned herein above
You can complaint about the bank as pension amount is a secured amount and cannot be deducted like this
No bank has authority and power to deduct or attach pension amount. It is illegal under Section 11 of Pensions' Act, 1871. Challenge the deduction in Court. You will get back deducted amount with interest and cost of suit.
i think there is a judgment of some High Court in which it is held that the pension account cannot be attached and money from that account cannot be used for repayment of the loan
i do not have it handy and will have to search for it
The bank will not normally recover the loan dues from a customer's pension account unless authorized by him/her. Please check if your father-in-law has executed any mandate letter authorizing the bank to do so while extending his personal guarantee for the loan.
- As per the provisions of provision(g) of Section 60(1) of the Code of Civil Procedure , pension amount cannot be attached.
- Further, Supreme Court has also passed a judgment after setting aside the Order of the Rajasthan High Court , that the bank cannot attached the pension amount , if the pensioner was a guarantor .
- Hence, you can file a Recovery suit against the said bank for getting the entire amount of attachment with interest.
lenders ask borrowers to enlist a guarantor who would be responsible for paying off a loan in case the borrower defaults on paying EMIs. Lenders typically ask you to enlist a guarantor in a home loan in case: One needs to borrow a loan amount that exceeds a certain limit as per lender policies.
Section 11 of the Pensions Act which states that the pension cannot be attached in civil disputes at the instance of creditors.
Therefore it is surprising that the bank has attached the pension amount of your father in law to recover the loan availed by the borrower.
It means you are not coming out with the facts or your story is totally different to that of the one posted here.
If the bank has recovered the loan amount from the guarantor then the guarantor can recover the same from the borrower by filing a money recovery suit within three years from the last deduction of the loan amount from his pension amount.
The pension amount of the guarantor cannot be attached by bank to recover the loan amount availed by the borrower, you can ask your father in law to file a recovery suit agaisnt the bank itself to recover the recovered amount and obtain an order of permanent injunction too agaisnt the bank from indulging in such activities in future too,.
Dear client I am sorry to hear that but in this case you have to negotiate with the institution from where you have got your loan sanctioned
