Kagaznama

Guarantee Agreement (Personal Loan)

At a glance

Price: Free
Stamp duty: A personal guarantee that creates no charge over immovable property is stamped as an Agreement — Article 5, Schedule I-A to the Indian Stamp Act, 1899 as applicable in Punjab, or the Chandigarh Administration's equivalent entry — at the residuary rate, in the same way as the Loan Agreement between Friends/Relatives and the Acknowledgement of Debt in this library.
Registration: Not compulsorily registrable. s.17 of the Registration Act, 1908 reaches instruments that create, declare, assign, limit or extinguish a right, title or interest in immovable property; a personal guarantee that creates no such interest is not on that list.
Witnesses: Not legally required for a simple contract under the Indian Contract Act, 1872.

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Also called

Personal Loan Guarantee
Surety Agreement
Guarantor Agreement
Contract of Guarantee
Zamanat Ikrarnama
Zamin Patra
ਜ਼ਮਾਨਤ ਇਕਰਾਰਨਾਮਾ
ਜ਼ਾਮਨੀ ਇਕਰਾਰਨਾਮਾ

When you need it

Stand guarantor for money one person has lent another privately — a friend, a relative, a colleague — where no bank is involved. Written for the case this library did not yet cover: a personal loan between individuals, typically made under a Loan Agreement between Friends/Relatives or a Promissory Note, where a friend or relative of the Borrower is willing to stand surety for it.

Governed by ss.126 to 147 of the Indian Contract Act, 1872. Not the Deed of Guarantee (Personal Guarantee) already in this library, which is written for guaranteeing a bank or housing finance company's home loan and assumes a regulated lender, SARFAESI enforcement and RBI wilful-defaulter reporting — none of which fit a private loan between people who know each other. Use that document instead where the underlying loan is a bank or HFC home loan; use this one where the Lender is an individual. Pairs naturally with a Loan Agreement between Friends/Relatives and a Promissory Note for the same loan — name the underlying loan document in the field provided so all three papers read together.

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See stamp duty, registration and witnesses

What follows is written for Punjab and Chandigarh. It states the position there rather than describing how it varies, so the amounts below are the ones that apply — worth confirming at the sub-registrar’s office, because rates change. If the property is anywhere else in India, none of this is yours.

Stamp duty

A personal guarantee that creates no charge over immovable property is stamped as an Agreement — Article 5, Schedule I-A to the Indian Stamp Act, 1899 as applicable in Punjab, or the Chandigarh Administration's equivalent entry — at the residuary rate, in the same way as the Loan Agreement between Friends/Relatives and the Acknowledgement of Debt in this library. PUNJAB: confirm the current Article 5 residuary figure and the correct sub-clause with the Sub-Registrar of the tehsil, or against the Department of Revenue, Rehabilitation and Disaster Management's published stamp duty table at revenue.punjab.gov.in, before the stamp is bought — the Guaranteed Amount can affect which sub-clause applies. E-stamp through the Stock Holding Corporation of India Limited (SHCIL), in the name of the Party bearing the duty under clause 10. CHANDIGARH: the same residuary agreement entry applies under the Chandigarh Administration's Rates of Stamp Duty & Registration Fees table at revenue.chd.gov.in; confirm the current figure at the office of the Sub-Registrar, 30 Bays Building, Sector 17, before the stamp is bought. BOTH: an insufficiently stamped instrument is inadmissible in evidence under s.35 of the Indian Stamp Act, 1899 until the deficiency and any penalty are paid — buy the stamp before signing wherever that is practical.

Registration

Not compulsorily registrable. s.17 of the Registration Act, 1908 reaches instruments that create, declare, assign, limit or extinguish a right, title or interest in immovable property; a personal guarantee that creates no such interest is not on that list. If the Guarantor is instead to secure this guarantee by mortgaging immovable property, that mortgage is a separate instrument with its own, generally compulsory, registration requirement — this Agreement does not cover that case, and clause 6.1's discharge-of-security point applies only to security the Lender itself holds over the Borrower's assets, not to any separate security the Guarantor may later give.

Notarisation

Not legally required, but useful, as on the Loan Agreement and the Promissory Note in this library, to fix beyond dispute the date the guarantee was given — which matters if the Guarantor later argues that a variance in the loan's terms, or an indulgence given to the Borrower, occurred without the Guarantor's knowledge or consent.

Witnesses

Not legally required for a simple contract under the Indian Contract Act, 1872. Two independent witnesses are nonetheless taken on this Agreement, as on comparable documents in this library, because what a Guarantor actually agreed to — and when — is very often the whole of a later dispute, and independent witnesses and notarisation both help to fix it.

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GUARANTEE AGREEMENT

This Guarantee Agreement (this "Agreement") is made at Chandigarh on 1 April 2026.

BETWEEN

Rajinder Kumar Sethi, of House No. 1451, Sector 33-D, Chandigarh 160020, PAN AFRPB2211J (the "Lender");

Vikram Sethi, of House No. 214, Phase 4, S.A.S. Nagar (Mohali) 160059, PAN AFRPB2212K (the "Borrower");

AND

Deepak Mehra, of House No. 88, Phase 3B2, S.A.S. Nagar (Mohali) 160059, PAN AFRPB2214M (the "Guarantor").

The Lender, the Borrower and the Guarantor are each a "Party" and together the "Parties".

RECITALS

A. The loan being guaranteed by this Agreement is: Loan Agreement between Friends and Relatives dated 4 March 2026 between the same Lender and Borrower, for a Loan Amount of Rs 3,00,000 (the "Loan").

B. At the Guarantor's request, and in consideration of the Guarantor's promise in this Agreement, the Lender has agreed to make or continue the Loan to the Borrower. Under s.127 of the Indian Contract Act, 1872, anything done, or any promise made, for the benefit of the Borrower is sufficient consideration for the Guarantor's promise to the Lender.

C. The Guarantor has agreed to guarantee repayment of the Loan on the terms of this Agreement, which is a contract of guarantee within the meaning of s.126 of the Indian Contract Act, 1872.

NOW THIS AGREEMENT WITNESSES AND THE PARTIES AGREE as follows:

1. THE GUARANTEE

1.1 The Guarantor guarantees to the Lender the due repayment of the Loan, up to a maximum of ₹3,00,000 (Rupees Three Lakh only) (the "Guaranteed Amount"), and undertakes to pay the Lender on demand, made as provided in clause 3, any amount that the Borrower fails to pay under the Loan, up to the Guaranteed Amount.

1.2 This is a specific guarantee, covering only the loan described above and no other or future liability of the Borrower to the Lender.

1.3 The guarantee under this Agreement covers the principal amount of the loan only, and not any interest or costs, in every case subject to the Guaranteed Amount as the maximum the Guarantor can be made to pay under this Agreement.

2. NATURE AND EXTENT OF LIABILITY

2.1 Unless this Agreement expressly provides otherwise, the liability of the Guarantor is co-extensive with that of the Borrower under the Loan, as provided by s.128 of the Indian Contract Act, 1872.

2.2 This is a guarantee of payment and not merely of the Borrower's solvency, and the Guarantor's liability arises on the Borrower's default under the Loan, without the Lender being required first to exhaust any remedy against the Borrower, except to the extent clause 3 below expressly requires a prior written demand.

3. HOW THE GUARANTOR IS CALLED UPON

3.1 The Lender may call on the Guarantor to pay immediately on the Borrower's default, without first suing the Borrower or exhausting any remedy against the Borrower, the Guarantor's liability being co-extensive with that of the Borrower under s.128 of the Indian Contract Act, 1872.

Questions about this document

Does the Guarantee Agreement (Personal Loan) need stamp paper or stamp duty in Punjab and Chandigarh?

See the full position on stamp duty, registration and witnesses

Does the Guarantee Agreement (Personal Loan) need registration in Punjab and Chandigarh?

See the full position on stamp duty, registration and witnesses

What does the Guarantee Agreement (Personal Loan) cost on Kagaznama?

Free.

Documents are free. Only kits are paid.

Does the Guarantee Agreement (Personal Loan) need witnesses?

Not legally required for a simple contract under the Indian Contract Act, 1872.

See the full position on stamp duty, registration and witnesses

Often needed with this document

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