• Barred by limitation

I was one of the director in Ltd company, in 2004 RS.96 lakhs of loan was taken from the bank and I was signed as guarantor   in 2005 I resigned as director from the company in 2006 bank financed Rs. 3 crore this time I was not signed any paper of Bank loan Documents In place of me  bank asked one more guarantor to the satisfaction of the bank and company provided one more director and guarantor In 2007 after AGM report submitted by the company to ROC my name is in share holders list and after every 3 years they taken AOD from others  not from me. In 2013 bank issued legal notice to all other directors. In 2014 they approached to DRT and applied OA in this they made me also a party. In DRT case is still running my self provided all above information to DRT for this I want an expert advocate to fight my case. so please answer this above I will approach to proper adviser
Asked 7 years ago in Property Law
Religion: Hindu

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5 Answers

The Director intending to resign shall send notice in writing to the Company. The resignation of a director shall take effect from:

1. The date on which the Notice Is Received by the company or

2. The Date, If Any, Specified by The Director in the notice, whichever is later.

The director who has resigned shall be liable even after his resignation for the offences which occurred during his tenure. A director shall also forward a Copy of His Resignation Along With Detailed Reasons for the resignation to the Registrar within 30 (Thirty) days of resignation through filing of Form DIR.11 under his Digital Signature. It means it will be mandatory for all directors to have Digital Signature under Companies Act-2013.

IF a director has “duly” resigned under acknowledgement from the company and the local ROC, THEN there is no liability applicable ariaising after the date of resignation. The onus of responsibility is on the resigned director, who has to clear his lawful obligations before resigning, that is withdrawal of signed cheques and honouring of other third party liabilities in whatever form and handover of all assets (Car, House, Phone or whatever) of the company in his possession. The Company too should accept resignation of such director, after absolving the director of all his liabilities (including pending cheques).

So check your status in the company at the time of filing of suit. The bank has every opportunity to approach the DRT for realising the debt from the company. If you are not a director at the time of the taking loan then you have no liability. If your name is reflected in OA then file your counter through a lawyer.

Ajay N S
Advocate, Ernakulam
4100 Answers
114 Consultations

1) you would not be liable for repayment of loan as you resigned as director of company

2) company appointed another director and bank agreed to accept the new director as guarantor in your place

3) you should contest the recovery proccedings intiated by bank against you as guarantor

4) engage a local lawyer in this regard

Ajay Sethi
Advocate, Mumbai
97748 Answers
7918 Consultations

The Indian Bank, Madras v. S. Krishnaswamy and Ors. AIR 1990 MS 115, in which it was observed in Para 12. "It is well settled that under Section 62 of the Contract Act, if the parties to a contract agree to substitute a new contract for it, or to rescind or after it, the original contract need not be performed.

2) A continuing guarantee is a guarantee which extends to a series of transactions, as defined in Section 129 of the Indian Contract Act. But, however, a continuing guarantee can be revoked at any time but only in respect of the future transactions by notice to the creditor as postulated in Section 130 of the Contract Act. Nothing is immortal in this world. All creations are subjected to decay and destruction guarantee is also liable to revocation. As such, continuing guarantee does not mean that it is perpetual and would continue till one's life time or as long as the sun and moon exist. It is, therefore, clear that the continuing guarantee is not a perpetual one and the same is subject to revocation by the surety and the limitation is that would enure only in respect of future transactions and such revocation by a notice to the creditor.

Ajay Sethi
Advocate, Mumbai
97748 Answers
7918 Consultations

Since you had signed as a guarantor in the capacity of director and not in any personal capacity, you canot be implicated in the case for any liability.

The company will answer about this on behalf of its guarantors.

If the company is not supporting you can engage an advocate from your side and fight this case to defend your personal interests.

The bank has already obtained the signatures of your successor director for the subsequent loans hence you may be absolved from the liabilities.

You can take the help of any lawyer from this forum or in your local for further advise on all such issues.

T Kalaiselvan
Advocate, Vellore
87952 Answers
2369 Consultations

When I will receive the answer I paid your require fees Rs. 400 and in the same time I am looking expert advocate to fight my case in Bangalore DRT

You have to engage the services of an advocate o your choice whether at Bangalore or anywhere.

You cannot demand.

You have paid the fees for getting answers to your questions, this will not guarantee you all other services.

T Kalaiselvan
Advocate, Vellore
87952 Answers
2369 Consultations

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