A guarantor's obligations persist despite allegations of fraud, and disputes regarding loan transactions should be resolved through appropriate private mechanisms rather than public law remedies.

JUDGMENT

The petitioner stood as a guarantor for the loan obtained by the 3rd respondent by mortgaging her property. The petitioner set out allegations of fraud committed on her by the 3rd respondent in connivance with the officials of the Bank. The petitioner seeks the following reliefs in the writ petition:

a. to issue a writ of mandamus or any writ, direction or order, directing the first and fourth respondents to conduct an enquiry into the circumstances under which the third respondent was issued with a loan of Rs.3,80,000/- on the security of the properties of the petitioner, situated at Sooranad in Kollam District and having lesser value than the loan amount.

b. to declare that the fourth respondent is entitled to proceed against the mortgaged properties belonging to the petitioner for realisation of amounts due from the third respondent only after taking steps for realisation of the amounts from the third respondent and his assets.

2. This Court on 3.9.2008 passed a detailed order noting that the 3rd respondent avoided his presence before this Court. Thereafter, the 3rd respondent was produced before this Court by the police. This Court recorded his statement. His statement will form part of the records of this case.

3. I am not adverting to the various factual aspects involved in the matter. In public law remedy, the court need to examine the matter from the angle of the questions pertain to public actions. The petitioner admits that she was a party to the loan transaction. Her claim is that in fact she approached the Bank as though she was the borrower and submitted that the entire money was taken away by the 3rd respondent. The petitioner was shown as a surety.

4. The Bank cannot be pre-empted from taking action for recovery of the loan amount. The Bank is free to proceed against the property. If the petitioner pays the amount on duress, certainly she can recover the amount from the borrower, who is the 3rd respondent. The borrower is having a case that the entire loan amount received from the Bank has been given to the petitioner and his brother and he had taken only Rs.47,000/-. It is submitted that he had deposited the amount he received with the Bank. A private dispute inter se between the parties cannot be gone into by this Court in a public law remedy. Therefore, all the issues between the parties are left open. If any one time settlement facility is available, the Bank shall afford such facility to the petitioner to settle the liability to enable her to salvage the property. The reliefs as sought for in the writ petition are declined. The Bank shall consider waiver of interest and extend maximum benefit to the petitioner in the light of Navakeraleeyam Scheme, 2018.

The writ petition is disposed of as above.