Banking law
Raju
(Querist) 13 October 2014
This query is : Resolved
Hi...I am the one of the 4 Directors of a Pvt Ltd. Co. with shareholding of less than 5%. Our Co. has taken the Bank limits both CC & LC to the tune of 7 Cr total. One of the Director who is authorised signatory in the Bank has given his flat as collateral & declared the value of Flat as 1.5 Cr. While taking the Limits from the Bank we all 4 have given the Personal Guarantee being the director of the company. Now I want to Resign from this company. What are my Liabilities towards Bank & if none of the director Pays to the bank, how the Bank will recover it,s money. Can it seize my house ( in the name of my father ) & FDs / Post Office Saving ( in my Name ). I had no say in the Banking Matters nor I was involved in the day to day Accounting Transactions. Kindly Advice.
Anirudh
(Expert) 14 October 2014
Whether you had any say in the banking matter or not has no relevance. It is enough that at the relevant point of time, you were one of the Directors of the Company in question.
However, the bank cannot seize the property which is in the name of your father. The bank can lay hands upon all other assets, which belong to you.
Rajendra K Goyal
(Expert) 14 October 2014
1. You want to resign from the directorship of the company, you have guaranteed the loan in personal capacity, till full loan is repaid, you would be liable to pay.
2. Bank can not proceed to attach the property which is in the name of your father till your father is alive and if he expires and you are entitled for any share in it, the share can be attached.
3. You should inform the Bank through duly acknowledged letter that you want to resign as guarantor, Bank should ask the company to arrange for another guarantor and if company fail to provide any alternate guarantee, you would not be liable for the fresh debits in the account after the given time.
4. Bank generally sanction / renew the limit for one year and after time given in your letter / the sanctioned period rule in Clayton case may apply.
Nadeem Qureshi
(Expert) 14 October 2014
Being a Director and personal guarantee you are liable to pay as per your guarantee.
the bank can not attached or sale any other property which is not in your name, but the bank may attached all the assets which will be in your name.
malipeddi jaggarao
(Expert) 16 October 2014
First you resign from the Board of Directors. The procedure is as follows:
Section 168(1) of the Companies Act:
A director may resign from his office by giving a notice in writing to the
company and the Board shall on receipt of such notice take note of the same and the company shall intimate the Registrar in such manner, within such time and in such form as may be prescribed and shall also place the fact of such resignation in the report of directors laid in the immediately following general meeting by the company:
Provided that a director shall also forward a copy of his resignation along with
detailed reasons for the resignation to the Registrar within thirty days of resignation in such manner as may be prescribed.
Section 168(2):
The resignation of a director shall take effect from the date on which the notice is
received by the company or the date, if any, specified by the director in the notice, whichever is later:
After resigning from the Board, serve notice to the Bank that you are no more a Director of the Company and you are withdrawing your personal guarantee. This is the procedure you are required to adopt.
You will be liable to the Bank as a guarantor for the debts of the company as on date of serving such notice. But your father's properties are no way connected with the company's debt. If the Bank goes to court for realization of the debt, your liability is limited to the date of serving the notice, that too as a guarantor. In the meanwhile pressurize the company to provide alternative guarantor to the Bank and obtain a letter from the Bank that you are relieved totally as guarantor.
T. Kalaiselvan, Advocate 
(Expert) 18 October 2014
I agree to the views expressed by expert Mr. Jagga Rao on he subject query. Bank has no right to touch a third party's property, be it your father or your wife. The liabilities will be limited to your own movables/immovable. In the immovable also, if the property inherited by you is of ancestral in nature, then it will be restricted to your particular share out of the share allocated to you. Rest other things have been properly suggested by other experts, which I endorse.
Vijyant Nigam (09807349001)
(Expert) 19 October 2014
You may resign. Then also inform the bank and request to your company as well as the bank to relieve you from the personal liability which is by way of the personal guarantee given by you. Bank can accept new guarantee from your company and will relieve you from the personal liability. Untill and unless you will not relieved by the bank, you shall be liable as a guarantor to repay the dues of the company. However, your father's property is free as already discussed by the other experts.
