Dear Sir, I am working as Legal Executive at Mumbai. I require advice on Section 60 of The Multi-State Co-operative Societies Act, 2002. The brief facts are as under:
An employee working in our company stood as guarantor to the borrower for an amount of Rs.31,00,000/- prior to her marriage.
According to Section 60 of the Multi-State Co-operative Societies Act, 2002, if the borrower fails to make repayment of the loan amount, the concerned bank has the right to recover the loan amount from the guarantor. Therefore the bank can direct the employer to deduct a certain amount from the salary/wages of the employee and to pay the same to the bank every month or otherwise. Hence the Company is under legal obligation to act upon.
In the present case, the borrower failed to repay the loan amount. The conciliation officer of the co-operative bank passed an award in the year and directed our company to deduct Rs.10,000/- p.m. from the salary/wages of the employee (guarantor) and make payment to the bank. The gross monthly salary of the employee is around Rs.28,000/-.
According to Section 60 of Civil Procedure Code, after standard deduction of Rs.1,000/- and 2/3rd amount for basic necessity, the deductible amount from the wages of employee would be Rs.8000/-.
Now, the employee addressed a letter to the concerned bank through her advocate that, her name is not mentioned in the award (her maiden name mentioned in the award instead of her name after marriage) so she is not liable to make payment to the bank and also submitted to our company that out of her gross monthly salary of Rs.28,000/- p.m., she is paying home loan installment of Rs.23,000/-.
Kindly advise whether the company can deduct the amount every month from the salary/wages of the employee and remit the same to the concerned bank in this scenario?
From India, Mumbai
An employee working in our company stood as guarantor to the borrower for an amount of Rs.31,00,000/- prior to her marriage.
According to Section 60 of the Multi-State Co-operative Societies Act, 2002, if the borrower fails to make repayment of the loan amount, the concerned bank has the right to recover the loan amount from the guarantor. Therefore the bank can direct the employer to deduct a certain amount from the salary/wages of the employee and to pay the same to the bank every month or otherwise. Hence the Company is under legal obligation to act upon.
In the present case, the borrower failed to repay the loan amount. The conciliation officer of the co-operative bank passed an award in the year and directed our company to deduct Rs.10,000/- p.m. from the salary/wages of the employee (guarantor) and make payment to the bank. The gross monthly salary of the employee is around Rs.28,000/-.
According to Section 60 of Civil Procedure Code, after standard deduction of Rs.1,000/- and 2/3rd amount for basic necessity, the deductible amount from the wages of employee would be Rs.8000/-.
Now, the employee addressed a letter to the concerned bank through her advocate that, her name is not mentioned in the award (her maiden name mentioned in the award instead of her name after marriage) so she is not liable to make payment to the bank and also submitted to our company that out of her gross monthly salary of Rs.28,000/- p.m., she is paying home loan installment of Rs.23,000/-.
Kindly advise whether the company can deduct the amount every month from the salary/wages of the employee and remit the same to the concerned bank in this scenario?
From India, Mumbai
The plea that the guarantor's post marriage name is not mentioned in the order is not a valid argument to stop recoveries. In deed your organisation has hardly any choice in the matter. There is a valid and binding order on you to recover and it takes precedence over others. The housing loan, is it being recovered from salary? As per Section 60 of CPC, the amount due could be recovered (Rs 8000 as stated) from salary and deposited and make a self explanatory submission to the authority concerned. It is for the employee to take legal recourse and get the order impugned before the higher judicial authorities.
From India, Mumbai
1530From India, Mumbai
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