Legal Question in Banking Law in India

ABC was a Private Ltd Company.It consists of two directors.The said Company has availed certain credit facility from the bank.Bank has stipulated that the advance should be secured by personal guarantee of the each director and accordingly full stamp duty has been paid on guarantee document.Subsequently if one of the director expired due to illness & another director has been inducted by the Company whether again full stamp duty is required to pay for guarantee document of newly inducted director?


Asked on 8/29/15, 8:06 am

2 Answers from Attorneys
Vivek Mapara Vivek N. Mapara

Sir

Personnel Guarantee is an individual / independent document executed between the Guarantors and the Bank. So when any person who gives any fresh guarantee is suppose to execute a new Guarantee Document upon paying of necessary Stamp Duty.

You seem to be confused with the Corporate Guarantee and Personal Guarantee. In corporate guarantee a company is a guarantor and in such cases, change in director would not require execution of fresh guarantee document, but personal guarantee is an individual and independent transaction between individual guarantor and bank and hence require fresh execution.

Feel free to contact should you have any further query.

Vivek N Mapara

Attorney

vnmlaws.com

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Answered on 8/29/15, 1:37 pm
Fca Prashant Chavan Expert Edge LLP

30.08.2015

Dear Sir / Madam,

Yes, Stamp Duty will have be borne on the new guarantee document.

Regards,

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Answered on 8/30/15, 5:31 am


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