Continuing guarantee_what defence to take
Sagnik
(Querist) 23 May 2013
This query is : Resolved
Dear all,
Our company had in the year 1994 availed a loan facility from Allahabad Bank. Certain the then Directors of our company & some of their relatives had become personal guarantors of the said loan. Thereafter, the said loan kept on renewing with new loan amounts etc. However, from the year 2001 the names of the said directors stopped featuring as guarantors of the renewed loan agreements. Around the year 2010 our account was declared as NPA by the said Allahabad Bank & thereafter assigned to an ARC, who thereafter approached the DRT to bring upon a prosecution on the company along with the said directors.
All the said directors are as of now not connected to our company in any manner & are of a progressive age. However, none of them have received a letter of release from the Bank & neither has even approached the Bank to release them from the said guarantee agreement.
In this context, can you kindly guide me as to how to dispute the ARC's effort to rope in the said guarantors who are not connected to the company anymore but who had in the year 1994 given their continuing guarantee ? The said guarantee agreement contains several provisions which are purely illegal in its nature. However, the guarantee is still a continuing guarantee.
Kindly guide me as how an issue of such a continuing guarantee is generally handled by the defendants.
Regards,
Sagnik Sanyal
ajay sethi
(Expert) 23 May 2013
company can afford legal fees . contact a local lawyer .
Guest
(Expert) 23 May 2013
As a management trainee, in what way you are connected with the old case. Company Secretary, CA, or the seniors in management of your company could well have guided you, as it seems to be one of your training class exercfise, as a management trainee.
Sagnik
(Querist) 24 May 2013
Mr. Dhingra Sir, I am actually no longer a management trainee of the company, though I had to undertake the said position earlier because it is mandated by ICSI for receiving my membership. I have been a corporate lawyer before becoming a CS & I am solely looking after the said affair as of now, even though I must confess that I have not dealt with such matter of continuing guarantee earlier. Please do understand that this is not a training exercise but a very real case pending at DRT-II, Jhandewala Delhi.
Guest
(Expert) 24 May 2013
If not a management trainee presently, you need to update your profile with the LCI, as that reveals your being a management trainee.
About the case in question, information provided by you is not sufficient on several counts. Any viable opinion can be made on examination and analysis of the case related documents.
However, based on the partial information provided by you, it can be said that if revised agreement was prepared and and revised guarantee taken by the bank every time of renewal or enhancement of the loan, only current guarantors can be made liable, not the previous guarantors.
