how can a guarantor under the indian contract act be prosecuted under section 420 of indian penal code?

Question

in case of default, the concerned company wants to proceed against the guarantor. can the criminal prosecution be instituted against the guarantor under section 420 of the indian penal code

Answer 1

Usually the liability of a guarantor is only upto civil liability with regard to repayment of the actual balance amount & interest thereon of the defaulted payment of the person whose guarantee such a guarantor had taken in any such credit contract. Still the actual civil liability of the guarantor can be assessed only after detailed studying the full credit contract & the term with regard to the guarantor as mentioned in such contact. Even the criminal liability of guarantor can be clearly assessed by such terms too along with other relevant evidence & circumstances of the case. It will have to be seen if any default in payment was done in convince with this guarantors in order to cheat the company giving such credit to the defaulter person whose guarantee he or she had given to proceed against him or her for the criminal complaint of cheating punishable under section 420 of the Indian Penal Code or not.

Answer 2

Normally a guarantor cannot be prosecuted for a criminal offence viz. 420 as the mens rea i.e. the criminal intention that he stood as a guarantor with a dishonest and fraudulent intention has to be proved. A guarantor can be definitely sued under the civil law as his liability is co-extensive with that of the principal debtor. Adv. Murtaza Najmi. Mumbai.

Answer 3

A guarantor who falsifies a document and escapes the obligations in a contract is liable for swindling under the Penal Law.

Answer 4

Judgements on guarantor