Can my guarantor be sued for my default?

Answer

A:

Yes, your guarantor can be legally sued if you default on your loan repayment. In Indian law, a guarantor’s role is not symbolic—they carry legal and financial liability similar to the primary borrower.

Legal Position of a Guarantor in India

Under the Indian Contract Act, 1872, a guarantor (also known as a surety) is legally bound to repay the loan if the borrower fails to do so. Once the borrower defaults:

1. The Bank Can Directly Sue the Guarantor

• The bank is not required to exhaust all recovery options against the borrower first.

• It may immediately initiate legal proceedings against the guarantor for full or part of the outstanding amount.

2. Court Proceedings & Recovery Actions

If the loan is secured:

• The lender can invoke DRT (Debt Recovery Tribunal) or initiate SARFAESI proceedings to recover the dues from the guarantor’s assets.

If unsecured:

• A civil recovery suit may be filed against the guarantor in a competent court.

3. Credit Score & CIBIL Impact

• The guarantor’s CIBIL report and credit score will be negatively impacted in case of a default.

• It may affect their future loan eligibility and financial credibility.

4. Guarantor’s Right After Being Sued

If the guarantor ends up paying:

• They can sue the primary borrower to recover the paid amount.

• This is known as the right of indemnity.

How Legals365 Can Help

Legal365 assists guarantors with:

• Reviewing and challenging illegal or early recovery actions

• Negotiating with banks to avoid litigation

• Filing for indemnity or protection if wrongly targeted

• Representing guarantors in court if sued

For support, contact:

Visit: www.legals365.com
Call: +91 9625961599

Advocate B.K. Singh and the Legal365 team can protect your rights as a guarantor and guide you through any legal proceedings.