Legal Reference Library

The Chhattisgarh High Court, in Manik Mehta vs. UCO Bank, has observed that even when the secured asset belongs to the guarantor, the borrower can also prefer an appeal to the Debt Recovery Tribunal (DRT). In the present case, the Debts Recovery Appellate Tribunal (DRAT) has found that under Section 17 of the Act, 2002, any person (including the borrower), aggrieved by any of the measures referred to in sub-section (4) of Section 13 may prefer an appeal to the DRT, however, in the instant case, the property of the guarantor having been auctioned, the borrower is not an aggrieved party. The DRAT had upheld the DRT order, which held that the borrower for whose credit facility the property was mortgaged has the right to challenge the recovery proceedings since the mortgager has the right to proceed against the principal borrower to realize the money that he had to pay to liquidate the dues of the principal borrower. Setting aside the DRAT order, Justice Prashant Kumar Mishra observe...

The debt recovery tribunal and the appellate tribunal "misdirected themselves" by pursuing the grandchildren of a guarantor when there was no evidence that they had inherited the estate of the guarantor, the Delhi High Court stated last week in the case, Rohini Kanoi vs Allahabad Bank. In this case, a firm took loan from Allahabad Bank which was not repaid. The bank took the firm and the guarantors to the tribunal. Since one guarantor had died, his grandchildren were also made parties by the tribunal. They challenged their impleadment, that too after ten years. The high court stated that the tribunal could not make the grandchildren suffer the trial on a "bald assertion", after a long delay, that the bank had learnt that they had inherited the estate of the guarantor.

Guarantors not responsible for prior transactions unless specifically mentioned in Guarantee document. Central Bank Of India vs Virudhunagar Steel Rolling Mills ... on 29 December, 2015 Bench: Vikramajit Sen, Shiva Kirti Singh REPORTABLE IN THE SUPREME COURT OF INDIA CIVILAPPELLATE JURISDICTION CIVIL APPEAL No. 3654 OF 2006 CENTRAL BANK OF INDIA ... APPELLANT Vs. VIRUDHUNAGAR STEEL ROLLING MILLS LTD. & ORS. ... RESPONDENTS 6 The decision in Sita Ram Gupta v. Punjab National Bank (2008) 5 SCC 711 is of no advantage to the Appellant Bank. That decision concerns the possibility of a guarantor revoking his continuing guarantee, with the objective of escaping his liability. This is not the case before us inasmuch as the defence of Respondent Nos. 2 to 4 is that they had agreed to stand surety only for transactions after 30.8.1974. Our attention was also drawn to B. G. Vasantha v. Corporation Bank, Mangalore (2005) 10 SCC 215 as also M.S. Anirudhan v. Thomcos Bank Ltd....

   The Bank of Bihar Ltd. v. Dr. Damodar Prasad & Anr., AIR 1969  297 Maharashtra State Electricity Board, Bombay v. The Official Liquidator, High Court, Ernakulam & Anr., AIR 1982 SC 1497 Union Bank of India v. Manku Narayana, AIR 1987 SC 1078 State Bank of India v. Messrs. Indexport Registered & Ors., AIR 1992 SC 1740 State Bank of India v. M/s. Saksaria Sugar Mills Ltd. & Ors., AIR 1986 SC 868 Industrial Investment Bank of India Ltd. v. Biswasnath Jhunjhunwala, (2009) 9 SCC 478 United Bank of India v. Satyawati Tondon & Ors., AIR 2010 SC 3413) Lachhman Dass v. Jagat Ram & Ors., (2007) 10 SCC 448; Narmada Bachao Andolan v. State of Madhya Pradesh & Anr., AIR 2011 SC 1589 ( IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 6204 OF 2009 Ram Kishun & Ors. ...Appellants Versus State of U.P. & Ors. ...Respondents J U D G M E N T We have considered the rival submissions made by learne...