Director not personally liable for company contract claims absent express undertaking, guarantee, indemnity, or independent tort basis.

A company is a separate juristic person and, in the ordinary course, a director acts only on its behalf, not as a conventional agent personally liable to third parties. Under Section 230 of the Indian Contract Act, 1872, an agent is not personally bound by contracts entered into for the principal unless there is a contract to the contrary. Personal liability of a director arises only if it is expressly undertaken, such as by guarantee or indemnity, or on an independent tort basis like fraudulent misrepresentation. In the pleaded facts, no such personal undertaking or legal basis was shown, so the director could not be impleaded for the company's contractual liability.

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Issues: Whether a director of a company can be made personally liable in a suit for recovery of damages for breach of contract by the company in the absence of a pleaded personal undertaking, guarantee, indemnity, or other basis for personal liability.

Analysis: A company is a juristic person and acts through its board of directors or through a director specifically authorized by resolution or the articles of association. A director may be described as an agent of the company only in relation to the company and for fiduciary purposes, but not as a conventional agent vis-a -vis third parties so as to attract personal contractual liability. Under Section 230 of the Indian Contract Act, 1872, an agent is not personally bound by contracts entered into on behalf of the principal unless there is a contract to the contrary. Personal liability may arise only where the director has expressly undertaken liability, such as by guarantee or indemnity, or in cases of tort such as fraudulent misrepresentation; no such case was pleaded here.

Conclusion: A director cannot be impleaded and held personally liable on the pleaded facts for the company's contractual liability, and the petition failed.

Ratio Decidendi: A director is not personally liable for a company's contractual obligations to third parties unless personal liability is expressly undertaken or otherwise legally established; Section 230 of the Indian Contract Act, 1872 negates personal liability in the ordinary case of agency.

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