S-138 Negotiable Instrument Act
Y Singh N Rajput
(Querist) 30 October 2010
This query is : Resolved
Managing Director of a Public Limited Company filed a suit under S-138 of NIA. No resolution was passed by the Company to appoint him its legal representative i.e., MD did not have POA to contest a legal case on Company's behalf.
On cross examination the plaintiff admitted that there was no resolution passed.
Whether this is enough ground for dismissal of the case or all facts of the case are yet to be recorder at the trial stage?
Parthasarathi Loganathan
(Expert) 30 October 2010
Yes. Resolution to this effect duly passed by the Board is mandatory for a Public Limited Company.
Vinod Singh Tomar
(Expert) 31 October 2010
Resolution and authority letter both must be produced. Since, admission has been made, complaint must be dismissed
ashish lal
(Expert) 31 October 2010
it is curable defect and not a ground for dismissal kindly see AIR 2002 SC 182
Kirti Kar Tripathi
(Expert) 31 October 2010
i agree with ashish. it is an irreluarity not illegality.
DEFENSE ADVOCATE.-firmaction@g
(Expert) 31 October 2010
resolution /authorisation may be necessary for other people but not for MD of any company. An MD of any company by his designation is incharge and capable of depose or initiate any action.
Yes there is one remedy where you can take out in cross that the MD was not aware of the particular case and hence not eligible to depose.
Advocate. Arunagiri
(Expert) 31 October 2010
Board resolution authorizing the MD to file a suit is not at all necessary. By his appointment as MD, he is authorized to do so. Only when some body else other than the MD files a suit, he needs the authorization issued by the any authority empowered to issue such a authorization letter.
Arun Kumar Bhagat
(Expert) 31 October 2010
It is a curable defect which should be cured during trial itself. See MMTC judgement of Supreme Court.
B K Raghavendra Rao
(Expert) 01 November 2010
It is not a suit that is filed under Section 138 of NI Act. It is a complaint. Managing Director of a company has inherent powers delegated in him by virtue of his duties and responsibilities enshrined in the Articles of Association. Therefore, a separate resolution or an authorisation for a M. D. is not required. You will not succeed if question his authority on this point.
