Car loan guarantor troubled because owner fails to pay EMI: What to do?

My dad's partner bought the car on loan, but we are asked to pay over Rs 1.3 lakh.

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My dad's partner purchased a KUV100 K8 in 2016 through a loan from Mahindra finance. He has properly paid all the instalments and since COVID hit, he was unable to pay some instalments and had extended the tenure of the loan. He was paying it for some time and had defaulted for 5 instalments of 25,000 each and now the tenure is over and cannot be extended further. My dad has a poor ability to remember something and he has signed as the Guarantor for the loan. They have shown all the documents he has signed including a green paper.

Now comes the issue. The recovery agent who is from Mahindra finance itself (not a third party) comes to our house every now and then asking for money. Since my dad is sick and on bed rest for the past year, I and my mother had to handle this agent. I kindly told him if you're not able to recover the money, take possession of the car itself. Why are you troubling us? Seems like the partner left the car for a service in Mahindra Authorized service centre and he has a pending due of Rs 61,000 there. So the recovery team could not repossess the vehicle. The partner has around Rs 1.3L pending to Mahindra finance and Rs.60k pending to the service centre.

But since they all are in the same network, can't they repossess the vehicle and sell it off? The one thing I don't understand is my dad's partner is still in town and they know his place of residence, office and every other detail about him. They also know where his car is. Then why do they pester the Guarantor? My mother's mental pressure has gone up because of this issue going on.

The two solutions my dad's partner has is:

1. Either pay Rs 60k to the service centre to release the car to Mahindra finance. Which he won't do because they would sell his car off and he doesn't want that to happen. My dad and partner are not on good terms now as well.
2. Pay Rs 1.3L to Mahindra finance so that they would stop pestering us. He says he would make the payment the next day, next week or next month. This has been happening for the past 3 months.

I know it's my dad's fault to sign as a guarantor. Is there any other way to try to talk to the recovery agent to stop coming to our house?

Here's what GTO had to say on the matter:

Your dad is liable for the car loan as the guarantor. That's just the way the system works, and rightly so

Here's what BHPian androdev had to say on the matter:

You should be complaining about your dad’s partner and get some neutral person to mediate a solution. He is the source of the problem and the solution must come from there.

Loan recovery guys are not at fault, as long as they are not breaking any law. You are knocking on the wrong door.

Here's what BHPian Turbanator had to say on the matter:

I will have a different take, no doubt OP's dad was a guarantor, but if the asset value is higher than recovery, then they should not bother his dad.

What these guys have sensed is OP's dad and family are easy to pressurise, and somehow they see a chance of recovery faster over repossessing that asset.

OP needs to deal with these finance companies firmly and tell them to sort internally by selling the car after taking possession. The max they can come is to show at his door or make calls, but anything physical and those finance guys will be in trouble. As soon as they sense that OP is even tough to handle than that defaulter, they will stop chasing.

OP should not give excuses like family sickness or inability to pay, he just needs to show he is strong and show them the door and tell them to come only if the loan value is short after selling that Jeep.

Here's what BHPian anjan_c2007 had to say on the matter:

Please immediately file a writ petition (your lawyer should be trustworthy) in the Madras High Court to restrain the Mahindra Finance staffers (they also employ foul-mouthed recovery agents in many cases) from approaching your father, the guarantor, unless all available options to recover the amount due from the loanee under the Civil Procedure Code are not exhausted. The court can give you an interim stay order in the first hearing itself, after service of notice to Mahindra Finance, the respondent and the loanee the business partner plus others if any.

For loans or defaults, the loanee is fully liable in the first instance. The High Court looking into the merits of the case can at the subsequent hearings ask the loanee to submit the lists of his movable and immovable properties on oath (any concealment and untrue statements on oath can land him behind the bars) and thereafter pass orders to attach movable properties of the loanee in the first instance. The attached properties can be sold by the loan disbursing agency to recover their due amount. Next, if the due recovery amount is not obtained even thereafter, immovable properties of the loanee are attached by a subsequent order and sold by the loan disbursing agency.

Thereafter, only after exhausting the above options can the guarantor be approached by the loan disbursing agency. The law is very clear.

You will have to submit proof to the court to prove that these recovery agents are approaching your father at his residence repeatedly and coercing him using unlawful means without following the due process of law. Also, submit proof that your father is sick and bedridden.

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