Board of directors resution to sell a property

This query is : Resolved 

15 November 2019


We are in process of a land purchase. We have a query in Legal verification. The land was sold by a pvt limited company to another private limited company in 2017. A person (Not a signatory authority of the company) from the seller company has signed in the sale deed, however, he has not given a GPOA, rather he was given only authority to sell the property as a Board of Directors resolution. Also the BOD resolution is Not a form part of the registration document.

Questions here are
1., is BOD resolution document is enough to sell the land by a person who is not a signatory authority?
2. If yes, should it be a form part of the registration document?


kavksatyanarayana (Expert)
15 November 2019

The signatory authority' signature shall be attested by BOD in the resolution. And the resolution copy and attestation of the signatory shall be filed before the Sub Registrar at the time of presentation of the document. It is suggest-able to attach the same with document. otherwise, it shall be filed by Sub Registrar in his office as a permanent record.

Dr J C Vashista (Expert)
16 November 2019

Whether executor of sale/purchase document was authorised before signing and registration on behalf of company?
It is advisable to consult a local prudent lawyer for better appreciation of facts and circumstance/ documents, guidance and proceeding.

16 November 2019

Hi Dr. Vashista,

The executor was authorized by the board of directors and we have the resolution copy. But my lawyer says, 1) it is necessary to execute a GPOA favoring the executor of the sale. 2) the resolution copy authorizing the executor should be a form part of the sale deed.

I need a second opinion on the same and hence reached out to this forum.

16 November 2019

Dear Sir,
Both the parties can take their known defences as both the parties have 50% case on either side.

K Rajasekharan (Expert)
16 November 2019

It seems what the lawyer says is the correct legal view based on legal principles.
This is mainly because when a company authorises a person it should be based on the company law. Then an official authorised-signatory alone can sign a document on behalf of the company. The authorisation is supported by the company law, Memorandum and bye laws.

However the company law does not support the company to allow an alien person to sign a sale document on behalf of the company. The resolution is not a statute but it gets legal sanctity only when it is guided and governed by the company law. (The registration act also stipulates that an alien person must have registered POA to register a sale deed on behalf of another title holder).

On the other hand the Board can decide to authorise a n alien person to sign the document on the company’s behalf and that action is guided by the power of attorney act.

By all means it seems that what the lawyer says is right.

16 November 2019

Dear Rajasekharan sir,
That's a great insight. Thank you so much for your inputs.


16 November 2019

Let me keepthis query for some more time

Hemant Agarwal (Expert)
26 November 2019

1. A BOD resolution, is a Final & is legally enforceable document, for any "specific" act for which the BOD resolution was passed. There is no need of any POA of the Co., IF BOD resolution is available and neither a registered co. liable to give any POA for any act for which the BOD resolution was passed.

2. A BOD resolution authority holder merely signs on behalf of the Co. (as a Legal Representative) and has no authority to sell the property (as you made out). A POA holder is vested with more global powers for various activities, which the Co. CANNOT give to a POA holder.

3. Further IF the property was duly registered before the local registrar of sub-assurances (who is a constitutional authority), THEN the Sale Deed is legally Final & Irrefutable, for all futuristic purposes. There is no legal need for annexing the BOD Resolution with the Sale Deed, since the BOD resolution is only as "one-time" signatory authority in capacity of "Legal Representative" of the Co., and further more so since this signatory authority via a BOD resolution, can be legally given to a Director /Manager /Supervisor /Peon / Agent ....

Keep Smiling .... Hemant Agarwal
VISIT: www.chshelpforum.com

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