Ashish Singla 098140 76600 (Cheque Victim's Lawyer. LUDHIANA (PB)) 22 September 2015

Directors's personal liability...

Hi Experts...

Mr. Ram and three others were running a partnership firm under the name of ABC & Co. On dated 20.06.2013 the Ram resigned from this partnership and on dated 22.06.2013 he (Ram) incoporated a new company with his wife as Co - Director (Silent director) under the name of M/S. ABC & Co. Pvt Ltd. Mr. Ram carried a liabilty of Rs. 20 Lacs of earlier partnership as outgoing partner due towards M/S. Sham Co.

M/S. Sham Co. alltered and replaced its old debtor named ABC & Co. by ABC Co. Pvt. Ltd, with due amicable understanding of Mr. Ram. Now new debtor named ABC Co. Pvt. Ltd. came into the books of M/S. Sham Tr& Co. instead of old debtor named ABC & Co.

Business continued with new combination in good faith for two years, at the end of 31.03.2015 net outstanding in the books of M/S. Sham & Co. was Rs. 17 Lacs, still due towards M/S. ABC Co. Pvt. Ltd. Now dispute starts...

Sham & Co. filed a cheque bounce case for Rs. 17 lacs in June 2015, with account staement of outstanding of same amount but containing Rs. 20 Lac as opening balance due towards ABC & Co by bebiting to the account of M/S. ABC Co. Pvt Ltd.

Sham & Co. has admitted all above facts under its XXXX..

Is it allowed in Company Law to carry forward the personal liability of director into account of comapny with or without consent of directors of companies...

Pl GUIDE..

Thanks..

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3 Replies

SAINATH DEVALLA (LEGAL CONSULTANT) 23 September 2015

My answer is no,cannot be carried forward.Can U please mention the contents of the statutory legal notice issued,for a better analysis?

Ashish Singla 098140 76600 (Cheque Victim's Lawyer. LUDHIANA (PB)) 23 September 2015

Sir,

The Legal Notice has been addressed to M/S. ABC & Co. Pvt Ltd. along with its two directors...

Claimed that all accused issued cheques in question to discharge legal debt of said company for an amount of Rs. 17 lacs, same bounced.......

R Trivedi (advocate.dma@gmail.com) 11 October 2015

The problem for accused company is that, the cheque was issued to clear the liability of partneship firm. This is a valid complaint ground.

It is immaterial whether the company had permission from its other directors to clear the firm's liability, yes non signatory directors in general can escape out if they can show that they were not involved, but signatory director cannot on the ground suggested by you.