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Director's Responsibility

(Querist) 02 January 2011 This query is : Resolved 
I wish to clarify one thing about Director's Responsibility in the Company.i.e. M/s.JSK Pvt Ltd was incorporated in 2009 with 3 Directors.Further it has obtained a Loan from one of the relatives of the directors for Rs.10 Lakh.The Loan agreement was signed by the Mr.Guna one of the Director & the Lendor. Subsequently Mr.Guna was dead & the lender has asked the remaining director to settle the Loan personally.Whether it is valid under the Companies Act 1956 & any other act?
Further the Lender has deposited (but it was dishonored by the banker due to insufficient funds) the PDC in his bank even he knows the Death of Mr.Guna ? Is it legally affect the remaning director?
What will be the responsibility of the remaining Directors in this regard?

Regards,
S.jegadeesan.
adv. rajeev ( rajoo ) (Expert) 02 January 2011
If the loan was obtained by the deceased director for the co., business then co., as well as other directors are liable
R.Ramachandran (Expert) 02 January 2011
You have not indicated whether the Loan agreement was on behalf of the Company. Whether the loan amount was utilised by the company? Whether the cheque (loan amount) was given in the name of the Company? If the answers to the above are in the affirmative, the company and its remaining Directors are liable.
s.subramanian (Expert) 02 January 2011
I agree with the view expressed by Mr.Ramachandran.
Raj Kumar Makkad (Expert) 02 January 2011
I also do agree with Ramachandran.
DEFENSE ADVOCATE.-firmaction@g (Expert) 03 January 2011
The cheque must have been in the name of company so co and current directors liable. Since the pvt ltd co is unnatural person and it has perpetual existance.
Ajay Bansal (Expert) 03 January 2011
See A.I.R.Manual.
H.M.Patnaik (Expert) 03 January 2011
Presuming the fact that the loan availed for the business of the company by one of the Directors, even though the director executing the loan agreement has expired in the meanwhile, other existing Directors are jointly and severally liable to repay the loan liability on behalf of the company in accordance with the terms of loan agreement.
Advocate. Arunagiri (Expert) 03 January 2011
I agree with Mr.Ramachandran.
JEGADEESAN (Querist) 03 January 2011
Thanks for your reply.
But in this Pvt Ltd, Mr.Guna got the loan for company purpose.So it is showing like company has to repay to the lender i.e. under unsecured Loan in its balance sheet.My ultimate question is
1.Suppose Mr.Guna was dead & also company fails to repay the loan after his demise , It will affect the remaining Directors? i.e. whether the remaining directors should settle from their own property?
2.Is it possible to suit a case in the court by the Lender against the remaining Directors for dishonour of the the Cheque even he knows the demise of Mr.Guna?

3.Whether the remaining directors should settle the Loan from their personal property if they are liable?

Regards,
S.Jegadeesan.
R.Ramachandran (Expert) 04 January 2011
The liability has to be paid from the assets of the company. In any case, the liability is limited since it is a private limited company. If the company is unable to pay its debt, then the provisions of winding up of the company would come into play.
JEGADEESAN (Querist) 04 January 2011
Dear Sir,
Thank you so much for your reply.
Kirti Kar Tripathi (Expert) 09 January 2011
I agree with Mr.Ramachandran.


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