Matter relating to corporate guarantee given by pvt ltd co.
Jaspreet
(Querist) 22 June 2016
This query is : Resolved
Sir,
I require advice on the following matter -:
We had formed a pvt ltd company in 1993 - 94 with three directors. I am one of the directors.
The company had given corporate gurantee to bank for five individuals for purchasing tippers for coal transportation to be attached with the company, the individuals after paying the installments for about one year, stopped running the tippers with the company and stopped paying the installments to the bank in 1995.
After 1998 there was no work in the company and in jan 2012 all three original directors resigned and new directors were inducted.
Now in 2015 the bank has started sending notices and we wanted consultation regarding this.
Regards
DR.VEDULA GOPINATH
(Expert) 22 June 2016
Dear Director
When you have given a corporate guarantee in favour of bank during and in the course of directorship, you are liable irrespective of the fact that you have resigned from the company. More often, the bank shall also take personal guarantee of directors also. Subject to acceptance of the bank, if your bank guarantee by deed of novation is replaced by the new directors, you would be discharged. I am not clear whether corporate bank guarantee is a continuing guarantee or not. After discharging the liability of the bank, you can sue the original debtors and youa re also having right of the securities (title deeds of trippers in your case). Directors are in fiduciary position of the company and they cannot avoid the liabilities because they ahve resigned from the Bank.
Please send me a copy of the bank guarantee for any further advice, if needed.
cs dr vedula gopianth advocate/arbitrator
c.p.s. ramachary
(Expert) 22 June 2016
You have to contact expert for appropriate legal solution with all the records
Rajendra K Goyal
(Expert) 23 June 2016
Has the company / directors renewed the guarantee / account in last three years.
Go through the terms of guarantee / account statement and related documents to explore the possibility whether the loan is time barred.
