Money suit filed against managing director
Deep Kumar Saha
(Querist) 18 September 2015
This query is : Resolved
Background: One proprietorship concern has entered into an agreement with a company and in terms of the agreement deposited security deposit toward guarantee of the service with an option to the company to forfeit the security deposit in case of non performance. Accordingly, the Company forfeited the security deposit due to non performance of the contract by the proprietorship concern. Now the proprietorship concern has instituted a money suit against the Managing Director of the Company by mentioning his name. Hence, the Company was not made a party directly.
My query:
1. whether the suit instituted against the Managing Director of the Company tantamount to suit against the Company?
2. can the suit be dismissed on the ground that the suit is instituted against wrong person, as the Managing Director is not personally liable for the dispute and therefore he is not the necessary party.
SAINATH DEVALLA
(Expert) 18 September 2015
AS a Managing Director is very much liable of the company's affairs.
But the opp party should have filed a suit against the company making the MD a party.
But as per the terms and conditions as mentioned by U the suit is not maintainable.
Rajendra K Goyal
(Expert) 19 September 2015
Whether the suit is in the individual personal name of the MD or as post of MD of the company?
Deep Kumar Saha
(Querist) 21 September 2015
As post of MD of the Company by specifying name like,
CEO & MD
Mr.__________
M/s_______________ Limited
SAINATH DEVALLA
(Expert) 21 September 2015
If it is a Company registered under Company's Act 1956,the creditors cannot proceed directly against individuals.The Company should be A1 followed by the Directors.
