• Is Ex-Director of company liable for payment to subscribers amount

I am ex director in one the chits company in Bangalore(Private limited) quit directorship in the year 2012.Till 2012 their were no payment default to subscribers as company started 20 months back.

Few complaints are registered with Registrar of co operative societies claiming that this company 's subscribers are not been paid their chit amount against current and all old directors who have resigned.Registrar of co operative r societies has considered this case and is filling FIR against all current and ex directors sighting that they mere resignation from company will not take away liability of non payment to subscibers.

My question is Is ex director of CHits company liable for payment to subscribers amount?
Asked 5 years ago in Criminal Law
Religion: Hindu

3 answers received in 10 minutes.

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10 Answers

1)A Director may resign from a company by giving a notice in writing to the company and the Board is required to intimate the ROC of such notice within 30 day in Form DIR-12.

2) In case the Director chooses, he/she may also send a copy of the resignation letter to the ROC along with the reasons for resignation using form DIR-11.

3)you are not personally liable for payment to subscribers

Ajay Sethi
Advocate, Mumbai
89022 Answers
6344 Consultations

5.0 on 5.0

Dear Sir,

It is a tricky question and answer may yes or depending upon relevant facts and terms and conditions, date of starting of particular chit. Memorandum of Articles of Association. You have to challenge such FIR if lodged. Please come to my office for legal advise in specific and basic upon documents. Normally you are not liable.

Kishan Dutt Kalaskar
Advocate, Bangalore
6069 Answers
392 Consultations

4.8 on 5.0

Certainly, if you were responsible for the day to day affairs of the business, your name shall be included in the FIR. However, the peculiar facts and circumstances of your case has to be pleaded that you were not responsible during the alleged malpractice which may absolve you of penal liabilities.

Rajaganapathy Ganesan
Advocate, Chennai
2085 Answers
8 Consultations

4.9 on 5.0

If the complaints have been registered after your resignation then you will not be liable for any fraud or liability.

though you may be called upon for investigation.

However, if someone levels direct charges upon you then you can be tried.


Anilesh Tewari
Advocate, New Delhi
17943 Answers
377 Consultations

5.0 on 5.0

As directors think that after the resignation from the company they will not be liable to the cheating they did in the name of company.

Please feel free and file a case against the directors including the ex director in section 420, 405 506of IPC in the High Court and let them face the court.

Vimlesh Prasad Mishra
Advocate, Lucknow
6849 Answers
23 Consultations

4.9 on 5.0

1. A company is an entity different from its director. As former director of the company you are not personally liable for the debts, if any, of the company.

2. If however an offence was committed then mere resignation from the company or even dismissal therefrom will not serve to absolve the directors from their liability under penal law.

Ashish Davessar
Advocate, Jaipur
30763 Answers
972 Consultations

5.0 on 5.0

The ex-directors are liable for the vents that took place during their time.

It may be a case of the subscribers entering into the chits during their time hence the the ex-directors also may be held liable.

If there is a FIR, first get AB and then challenge the false allegation on merits and documentary evidences which you may rely upon to defend your interests

T Kalaiselvan
Advocate, Vellore
79184 Answers
1611 Consultations

5.0 on 5.0

first of all cooperative society and company are 2 different thing legally speaking. if you want to complain against a company you should file that to the registrar of company and not to the registrar of cooperative society.so there is a jurisdiction issue. you file your reply on this ground.

next retiring director is not liable for company's loss. acting directors are.

Arnab Kumar Banerjee
Advocate, Kolkata
112 Answers

4.0 on 5.0


Reply to the complaint with your version that you were out from the company before the time when the default of the payments started.

If FIR is filed then go for the anticipatory bail in accordance with the sections under which the FIR is lodged.

Thank You

Rahul Jatain
Advocate, Rohtak
5365 Answers
4 Consultations

4.8 on 5.0

Dear Client,

Any liability occurred after the resignation, has no bearing on the ex director.

Supreme Court in one Judgement ruled -

The Bench held that no complaint could be filed against a director who had resigned his/her post prior to the dishonour of the cheque and

Same will apply in ur case.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

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