My friend took out loans totalling ₹90 lakh from a cooperative bank in Borivali against his commercial property worth ₹1.5 crore in 2012. I acted as a guarantor, along with another person, and provided all necessary documents like income proof. For the past year, my friend has been unable to repay the loan, making the account a Non-Performing Asset (NPA). The bank is now approaching me at work, citing Sections 49 and 101 of the Maharashtra Co-operative Society Act, 1960, to recover the outstanding amount from my salary. They haven’t been able to reach the other guarantor. Should I be held responsible before the bank attempts to recover the money from the borrower’s property?

Apni Law
Apni Law
Law Forum › Category: Banking / Finance › My friend took out loans totalling ₹90 lakh from a cooperative bank in Borivali against his commercial property worth ₹1.5 crore in 2012. I acted as a guarantor, along with another person, and provided all necessary documents like income proof. For the past year, my friend has been unable to repay the loan, making the account a Non-Performing Asset (NPA). The bank is now approaching me at work, citing Sections 49 and 101 of the Maharashtra Co-operative Society Act, 1960, to recover the outstanding amount from my salary. They haven’t been able to reach the other guarantor. Should I be held responsible before the bank attempts to recover the money from the borrower’s property?
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Apni Law Staff asked 11 months ago

My friend took out loans totalling ₹90 lakh from a cooperative bank in Borivali against his commercial property worth ₹1.5 crore in 2012. I acted as a guarantor, along with another person, and provided all necessary documents like income proof. For the past year, my friend has been unable to repay the loan, making the account a Non-Performing Asset (NPA). The bank is now approaching me at work, citing Sections 49 and 101 of the Maharashtra Co-operative Society Act, 1960, to recover the outstanding amount from my salary. They haven’t been able to reach the other guarantor. Should I be held responsible before the bank attempts to recover the money from the borrower’s property?

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Best Answer

Apni Law Staff answered 11 months ago

Under Section 101 of the Maharashtra Co-operative Society Act, 1960, the bank can recover the loan amount from you as a guarantor. However, before pursuing you, the bank must first exhaust all remedies against the borrower, including attempting to recover the money from the property used as security.

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