Mitesh (AM) 25 March 2011
Is borrowing power of a private Ltd. company should be specified in MOA? My company has lend a sum of Rs. 1.00 lakh to a private ltd. company. However, now we are being adviced, since borrowing power is stipulated in Articles of the company and not in Memorandum, the act is Ultra Vires and as such not enforceable in the court of law.
I want the advice from experts about the case. Can I have any judgement as my reference for my claim?
BVVSN MURTHY PATNAIK (Sr.Executive) 25 March 2011
Even if the borrowing is Ultr Vires the lender can recovery the money, provided the lender is able to identify the project/property in which the borrower was in vested the borrowed amount as per the principle of ‘DOCTRINE OF IDENTIFICATION’.
BVVSN MURTHY PATNAIK (Sr.Executive) 25 March 2011
Even if the borrowing is Ultr Vires the lender can recovery the money, provided the lender is able to identify the project/property in which the borrower was in vested the borrowed amount as per the principle of ‘DOCTRINE OF TRACEBLE’.
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