Excelsior Correspondent
SRINAGAR, Feb 26: High Court has ruled that the bank can deduct the liability of loan from guarantor in case the actual loan borrower fails to liquidate the loan amount.
Justice M A Chowdhary dismissed the plea of one Dev Raj claiming to be a retired Field Assistant from Agricultural Department and receiving a monthly pension of around Rs.36000 which is credited to his account maintained with J&K Bank Ltd, Branch R. S. Pura alleged that to his surprise, without any prior notice or information to him, the Bank deducted an amount of Rs.50,000 from his pension account on 25.08.2025 towards the recovery of the loan raised by one Gagandeep Choudhary from the Bank Branch Head, Kulliyan, Jammu, wherein the petitioner had stood as one of the guarantors on 09.03.2018 for repayment of Cash Credit Facility of Rs.15.00 lakhs for meeting the working capital of loanee’s business.
“The Bank was well within its right to deduct the amount from petitioner-guarantor’s account, in view of contractual liability. The writ petition filed by him is found to be bereft of any merit and substance and also non-maintainable. The writ petition is thus dismissed alongwith connected applications”, Justice Chowdhary concluded.
The court while giving finding on the issue said that the petitioner-guarantor had entered into a contract with respondent-Branch Head of Kulliyan, while offering himself as a guarantor to the loan raised by the borrower, as such, there was a contractual obligation between the guarantor and the J&K Bank.
Underscoring the ruling of Apex Court on the issue, the court said it is held that there is no illegality in the action of the bank in deduction of the money.
“It is not a case that the pensionary income of the petitioner cannot be subjected to recovery in consequence to recover the amount, from the petitioner who had stood as guarantor against a loan having been defaulted by the loanee” the court said adding with “Viewed thus, it is held that the pensionary amount of the petitioner having been credited to his account in the bank, can be stated to have been paid to him and when he had received the same by credit of the amount in his account, the same can be subjected to attachment with regard to his liability as a guarantor in a loan case. Viewed thus, the petitioner has failed to make out a case on this count”, read the judgment.
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