Being only guarantor can not make director liable on behalf of company for bank loans
Being only guarantor can make director liable on behalf of company for bank loans ?
The Supreme Court of India rejected the claim of the bank in such cases in
CENTRAL BANK OF INDIA Vs. VIRUDHUNAGAR STEEL ROLLING MILLS LTD. and ORS. .
CENTRAL BANK OF INDIA Vs. VIRUDHUNAGAR STEEL ROLLING MILLS LTD. and ORS.
Appeal: CIVIL APPEAL No. 3654 OF 2006
Petitioner: CENTRAL BANK OF INDIA
Respondent: VIRUDHUNAGAR STEEL ROLLING MILLS LTD. and ORS. .
And held
In a pre-existing debt of which the surety had no knowledge; that there can be no presumption that the surety will be efficacious for prior as well as current and future debts.There is also no controversy whatsoever that the Bank account lay dormant after this date, all dealings having been transacted much prior thereto. Such being the position, it is not open to the Appellant Bank to pursue Respondent Nos. 2 to 4 for recovery of debts incurred by the Respondent Company in favour of the Appellant Bank. We may clarify that our decision is founded on the evidence that has been recorded in this suit. We should not be misunderstood to have held that a guarantor can, in no circumstances be fastened with liabilities which had been incurred in the past which the guarantor assumed liability for. 8 We accordingly dismiss the Appeal by affirming the concurrent findings arrived at by both the Courts below. There shall however be no order as to costs.
Being only guarantor can make director liable on behalf of company for bank loans ?
The Supreme Court of India rejected the claim of the bank in such cases in
CENTRAL BANK OF INDIA Vs. VIRUDHUNAGAR STEEL ROLLING MILLS LTD. and ORS. .
CENTRAL BANK OF INDIA Vs. VIRUDHUNAGAR STEEL ROLLING MILLS LTD. and ORS.
Appeal: CIVIL APPEAL No. 3654 OF 2006
Petitioner: CENTRAL BANK OF INDIA
Respondent: VIRUDHUNAGAR STEEL ROLLING MILLS LTD. and ORS. .
And held
In a pre-existing debt of which the surety had no knowledge; that there can be no presumption that the surety will be efficacious for prior as well as current and future debts.There is also no controversy whatsoever that the Bank account lay dormant after this date, all dealings having been transacted much prior thereto. Such being the position, it is not open to the Appellant Bank to pursue Respondent Nos. 2 to 4 for recovery of debts incurred by the Respondent Company in favour of the Appellant Bank. We may clarify that our decision is founded on the evidence that has been recorded in this suit. We should not be misunderstood to have held that a guarantor can, in no circumstances be fastened with liabilities which had been incurred in the past which the guarantor assumed liability for. 8 We accordingly dismiss the Appeal by affirming the concurrent findings arrived at by both the Courts below. There shall however be no order as to costs.
no plus ones
