07 February 2019
One of my client is a private limited company. There are four directors represented by two individuals A and B and their spouses. Both the individuals A and B are signatory to bank accounts, (either or survivor basis). Now there is a dispute among the two directors. A has total control over the bank operations and is not sharing any information with B. B wants to move an application with the bank to stop the debits/ withdrawals in the cc account and as well wish to write to bank to withdraw the personal guarantee that he has given. Now my query is, whether the bank has to compulsory act upon the request of B and stop operations in the account or will the bank refuse to entertain the instructions of B and keep the bank operations going. Please give me your valued opinion along with case law or RBI circular if any.
07 February 2019
Dear Mr Sood Bank cannot act simply on request of one Director. Every request w.r.t change in Operation mode has to be accompanied with Board Resoluton passed by Board of Directors and signed by atleast 2 directors.
CAclubindia
