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TMI Blog2020 (1) TMI 1081X X X X Extracts X X X X X X X X Extracts X X X X ..... the affairs of the Company as entrusted to them by the shareholders by adopting due procedure prescribed in the Articles of Association. Unless there is a separate contract, the Directors cannot be held personally liable, as has been done in the present case. We do not find any merit in the arguments advanced by the learned counsel for the first respondent Bank in this regard and, therefore, the learned Tribunals have failed to appreciate such legal distinction in the facts before them. The matter remanded back to the learned Debts Recovery Tribunal-I, Chennai, for deciding the Original Application of the first respondent Bank afresh in accordance with law - petition allowed by way of remand. - W.P.No.27258 of 2019 - - - Dated:- 4-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts. The first defendant is a company represented by its Directors, viz. The 2nd and 3rd defendants herein. The applicant bank filed Ex.A15, Board Resolution of the first defendant company. The said Board Resolution is not disputed by the defendants. Both the directors of the first defendant company viz., defendants 2 and 3 have signed the same, wherein it was resolved to negotiate, finalise, sign, execute and deliver all deeds, documents, etc. in connection with the business instalment loan from the applicant bank. Admittedly, the defendants sought and obtained business instalment loan from the applicant bank and later defaulted. Therefore, Ex.A15, Board Resolution totally silences the argument of the defendants that the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ault of payment by the defendants, the Applicant Bank is at liberty to sell the schedule mentioned property and appropriate the sale proceeds towards the decreetal dues, (c) If the sale proceeds are not found sufficient to cover the amount due and payable to the Applicant Bank, defendants 2 and 3 are personally liable for all such amounts due. (d) It is further ordered that any amount remitted or realized if any, during the course of the proceedings, shall be given due credit to the loan account of the defendants. (e) The applicant bank is entitled for costs of this application. 9. The applicant bank is directed to file costs memo within two weeks of the receipt of this ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceed against the appellant. The appellant had made a pre-deposit of ₹ 9 lakhs. The bank is directed to receive it and appropriate the same against loan account. With the above observations, appeal is disposed of. 3. The learned counsel for the petitioner, Mr.R.Parthasarathy, has urged before us that the petitioner being Ex-Director of the second respondent borrower viz., M/s.Karismaa MEP Service Private Limited, could not be held personally liable for the debt determined in favour of the first respondent - M/s.Deutsche Bank AG, and, therefore, the learned Debts Recovery Tribunal-I, Chennai, in its order dated 31.8.2017 passed in O.A.No.310 of 2014, has wrongly hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side of the first respondent Bank that no separate personal guarantee was executed by the petitioner in favour of the first respondent Bank to enforce the recovery of debt from the petitioner. However, the learned counsel for the first respondent Bank, Mr.T.K.M.Sai Krishnan, sought to raise and argue with regard to the need to lift the corporate veil in the present case. 6. We are not inclined to accept the later submission of the learned counsel for the first respondent Bank for lifting of corporate veil. In the first instance, it is not a usual thing to be done. It is only when fraud is established that the lifting of such corporate veil becomes necessary after recording proper reasons and not otherwise. Sinc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and observed that the said Board Resolution was signed by the second and third defendants also, it fell in error, while concluding that the said Board Resolution Ex.A15 totally silences the argument of the defendants that the second defendant had not signed in his personal capacity and as such he is not liable for the OA claim. There was neither any demand, nor documents of the Directors' personal liability before us. The learned Debts Recovery Tribunal-I, Chennai, at the conclusion in paragraph 8 of the impugned order, ex facie , erred while allowing the application held that the defendants are jointly and severally liable. 11. The difference between Partnership law and Corporate law has been given a com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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