The managing director” of a company

company had power to me money upto Rs. 30,000 without the consent of mumbles in general meeting. They theme’s lent Rs. 50,000 to the company against debentul”es. Is the company liable Solution. On the facts of the case, directors could be imputed with the knowledge of irregularity in the transaction. The doctrine of indoor management
cannot be invoked in this case. The company is liable only upto Rs. 30,000.

of the company. The Airtimes pended that the managing dh”Cctol” could do so only on a l”Csolution of the general meeting. No such approval had hen taken. Is the company liahle on the bill ‘!

Yes, the company IS liable on the basis of rule in Truant’s CHse. An outsider is not obliged to look into the regularity of internal proceedings [Royal

Briti,h Bank Company issued a share certificate in favor of ‘A’ which appal’ently complied with the company’s articles as it was pUI’plll1cd to be signed hy two

directors and the and it had company’s seal affixed to it. In fact, the secl’etl1l’Y had forged the signatures of the and affixed the seal without .authority. Is the cel1ificate binding on the company?

No. The certificate issued is a mere forgery. Forgery is nullity. A company ClIO never be held bound by forgeries committed by its ofticers.

The doctrine of indoor management only applies to irregularities that otherwise might elect a genuine transaction, but it cannot apply to a forgery. Can the Powel’ to alter” articles be taken away by any provision in the memorandum or lII.ticles 01’ by a contract ?No. The power to alter articles is a statutory power given by Section 31 nod it cannot be neat by a contract or any provision in the memorandum or articles.