A Guarantor has several avenues open to him which will be discussed in this article. He certainly cannot be called helpless if he knows how to approach the problem in the right manner.
Often when a Bank, Non Banking Financial Company (NBFC for short), or any other Creditor grants loan to someone, they insist on having a Guarantor, who can protect the Bank or NBFC against non-payment by the Principal Borrower (namely the party which borrows the loan). Generally a Promissory Note is executed by the Guarantor to personally bind him.
Therefore a person who is under such threat must marshal his resources skillfully in order escape such illegal arrest. And I must say that engaging an able Advocate is one of the most crucial aspects of such marshalling.
Director’s whole company can be taken from his hand and given to a third party (called Receiver). The Director is completely thrown out from his Company’s management and he cannot run the Company anymore, as the Receiver is the new boss
If ESIC wants to effect a recovery from the company it can sell the assets of the company but the personal assets of the Directors are out of reach for it
