SC Holds Guarantor Liable for Original Loan, Not Unauthorized Overdrawals

Bhagyalaxmi Co-Operative Bank Ltd. Vs Babaldas Amtharam Patel (D) Through Legal Representatives & Others (Supreme Court of India) Surety Not Fully Off the Hook: Supreme Court Says Guarantor Liable for Original Loan, Not Unauthorized Overdrawals The Supreme Court in held that where a bank permits the borrower to withdraw amounts far beyond the sanctioned credit limit without the consent or knowledge of the guarantors, the guarantors cannot be saddled with liability for such excess withdrawals. However, the Court clarified that the sureties are still liable for the original sanctioned amount...