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Dispel some common misconceptions about the various laws.



When you agreed to guarantee your friend’s home loan, did you investigate his payments history? According to a Supreme Court rule, if the borrower is unable to repay the loan, the lender can recover his debts from the guarantor. If your friend defaults, his obligations may be transferred to you. Yet, when people sign up as guarantors for loans taken out by friends and relatives, few people know this or check it.
Even the brightest of us have misconceptions about a variety of topics. In this post, a top team of experienced advocates in Navi Mumbai from the firm Paarthasarthi has debunked common misunderstandings regarding the legal stance on financial concerns and clarified what is permissible. This is critical since believing in something that isn’t legally sound might negatively influence your finances. But, of course, not knowing the law should never be used as an excuse to make a mistake.

1) I have to take the originals to court.
Photocopies that have been certified are appropriate.
When filing a plea in court, don’t present the original documents because you can lose them. When you file a petition in court, you must include affidavits and certified copies of the original documents you want to exhibit as evidence, according to the Civil Procedure Code of 1908. “Submitting the original documents you want to exhibit as proof would be a mistake.” Likewise, submitting the originals with the complaint would be a mistake since you risk losing them. You will, however, be obliged to provide the originals to the hearing. If the originals aren’t available, you can also present photocopies at that time. To ensure the stamp of validity, these photocopies will need to be certified and attested by a gazetted officer.

2) I have the freedom to give away ancestral property as I see fit.
It belongs to the entire family, not just one person.

While there are financial advantages to forming a Hindu Undivided Family (HUF), there is a restriction on property transfers. According to a recent judgment by the Bombay High Court, you cannot donate ancestral property jointly held by the HUF unless you are the last surviving member. The decision was made in a case brought by the sons of Mallappa Isapure, a man with two wives. He shared the ancestral estate amongst his two wives’ sons.
3) Delegation can be done with just a letter of authorization.
It’s suitable for simple chores but not for complicated deals.
While you may be an expert at managing your finances, there are occasions when you need to transfer control to someone else. The letter of authority and a power of attorney are the two most regularly utilized documents for this purpose.
A letter of authority is a simple document that can be used for everyday things such as picking up a checkbook from the bank or submitting papers on your behalf. However, because this is not a registered document, it will not be approved for more complicated transactions like the sale of real estate or other assets.
Because the transaction is more significant, you’ll need a power of attorney to delegate authority. A power of attorney is a more specific document that specifies how the transaction will be carried out.

4) As a guarantor, I am not required to repay the debt.
If the borrower fails to repay the debt, the lender may ask the guarantor to do so.

When a friend or relative asks you to stand guarantee for his debt, don’t take it lightly, says Viraj Ravindra Patil, an advocate in Navi Mumbai. The Supreme Court determined that a guarantor’s responsibilities and liabilities are the same as those of the borrower. Ganga Kishun had acted as a guarantee in this lawsuit before the Supreme Court for a debt obtained by his friend Ganga Prasad, who died before the amount was entirely returned. When the bank attempted to recoup the loan by selling Kishun’s land, he filed a lawsuit. However, following a lengthy legal battle that reached the Supreme Court, it was decided that if the borrower failed to pay, the bank had the authority to reclaim the debt from the guarantor.
Aside from repaying a loan that was taken out by someone else, the proceedings may have a negative influence on your loan eligibility. If the borrower defaults, the banks will seek payment from you. Your credit score will be affected if you are unable to pay. Worse, before providing you a new loan, banks analyze the loans for which you are acting as guarantor to determine your repayment capacity. As a result, you should ideally act as a guarantor for loans with shorter terms so that your obligation ends sooner. Avoid becoming a guarantor if you are unsure about the debtor’s ability to repay.
5) To leave property to heirs, an online will is sufficient.
Online wills are not recognized by Indian law. It must be authenticated and signed.

Several Web portals and firms now allow you to draught an online will, according to Abhaysinha Patil, an advocate in Navi Mumbai. Register on the website, and you will be guided through the process step by step. All you have to do is answer a few questions, and the software will create a will for you. An online will would set you back about Rs 10,000. Many foreign websites, such as Q-Will in the United Kingdom and in the United States, offer various templates from which you can select the one that best suits your needs, while others provide one-size-fits-all solutions.
The service provider will email you a draught of your will when you put in the specifics of your assets and beneficiaries. However, your job isn’t done yet. Because India does not recognize the concept of an online will or a digital signature, you must obtain a physical copy of the will. As a result, you’ll need to print the online will and sign it in front of two witnesses.
These two witnesses must certify to the will; else, the document will be ruled invalid. You can also register your will, while it is not required. In this regard, Indian law is pretty straightforward. Online portals only assist you in drafting the will; it is your job to sign it and have it attested.