Guarantor’s liability in loan from Co-operative society.

Dear members, My wife along with her female office friend has given a guarantee to a unsecured loan availed by staff ( Mr. X ) from the companie’s staff co-operative society in which my wife is depositing ( as an investment ) monthly Rs. 1K. Mr. X has availed a loan when he was located at Nagpur, however latter on he transferred to another location and after working on new location for few months he resigned. He got the all settlements from the company as either Mr. X or company has not reported his resignation to co-operative society. After almost a year my wife approached society for some reason, at that time my wife made society noticed about the resignation of Mr. X till that time surprisingly society was not aware of default of EMIs of Mr. X. Post which my wife has requested society on mail to refund her total investment /deposits done with society. None of representative as reverted on the concerned matter to long, hence my wife has contacted society representative on phone, he verbally denied for return the investment on account of default of X. Points to be noted : When society was not receiving EMIs from X why the not issued a notice to him / guarantors. When my wife has made them noticed of default event that they have not took appropriate action. My wife has requested them to send society representative for meeting / collection of loan outstanding from X ( I have recorded Calls as a proof) Despite of regular follow-ups with society they didn’t bother for recovery of defaulted loan. I have further confirmed that my wife has not received any notice for default ( in guarantors capacity ) My question are : How can they hold the investment of my wife against the loan default of X. Why guarantor is penalized for their inability to recover the defaulted amount. ( not taking proper actions post 90 days ) When EMI to be deducted from salary directly, how they have allow the Mr. X to depart from company. Can I file a suit against the society for mental harassment and for involving my wife in his wilful default. Please suggest appropriate remedies to recover the deposited money form society