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Even if Its a bad directory or banned site from Google or any Search Engine?
if Yes then my compititors and enimy can submit my site to bad Directory to de-Rank my site.
I think It dosen't matter that which bad site is linking to you but its matter that which bad site you are linking
Whats your thoughts?
Nothing controversial there.
Who Links To You is a little more complicated. If a random bad site links to you, no worries; nothing to do with you. Not your problem.
But if you (for example) join a link network, where you link to site #2, site #2 links to site #3, site #3 links to site #4 ..... site #4,999 links to site #5000, site #5000 links to you, then you are in trouble if some of them are bad sites.
While you did not 'set the link', you chose to join the club. And if the club is in bad neighborhood, you will take the consequences.
This had been true for over a year now, and most of the bigger link networks have been identified and neutralized. A few smaller ones are still recruiting, so if you want a ban, it's still possible to join before Google finds and bans them! ;)