Proforma Account

In DRT proceedings, when the borrower's loan is the primary account, related accounts or guarantors may be added as "proforma" parties for the purpose of the recovery proceedings. Proforma defendants are parties against whom the decree will run but who are not the primary defendant.

In practice, when a bank files an Original Application before the DRT, the borrower is the principal defendant, but the recovery rarely stops with one signatory. Counsel adds related accounts, co-obligants and guarantors as proforma parties so the decree, when passed, runs against everyone bound by the security and guarantee documents — not just the operating borrower. A guarantor who is left out of the array of parties cannot be proceeded against under that Recovery Certificate, forcing a fresh application and fresh limitation problems. So the array of parties is drafted carefully at filing: every person who signed a guarantee deed, every co-borrower, and every mortgagor of charged property is impleaded. The borrower side, conversely, scrutinises whether a proforma party was properly served and whether any relief is actually claimed against it. Getting the array wrong means an unenforceable decree against a solvent guarantor. Well-advised creditors confirm the complete array of parties before the OA is presented.