Thursday, 19 April 2018

Company Registration in Tirupur

Company Registration in Tirupur

Company Registration in Tirupur

Validity  of the Document

The English cases on the issue of validity of documents arising out of mis-description of the name of the company discussed below will continue to provide guidance in the context of the 2013 Act as well as they did under the 1956 Act.The fact that a company id mis-described or misnamed in a document does not make the document ineffective provided it was clear that the document was intended to be made in the name of the company.The section only prescribes the additional liability of the officers concerned as long as the company does not honor the document.The fact that an officer of the company is liable in respect of a document which should have used the company's name in full but did not do to so, would not exonerate the company if it is liable otherwise, and if the company is liable ,it would appear that the officer or agent who has the complied to satisfy the obligation may recover an indemnity from it. A document was purported to be signed by two authorized signatories. A director signed the guarantee and the debenture in his own name and forged the signature of his co-director.The question was whether the document could be deemed to have been duly executed by the company.The decision of the court was as follow: On the evidence, the signatures purporting to be the signatures of a director on the guarantee, the debenture and the board minute were not his signatures. The documents had been signed by the other director in his name in accordance with a practice adopted by them that where it was convention the director would sign legal documents both in his own name and that of the other director provided he knew in general terms of underlying transaction and agreed to it.However, he never given actual authority, whether express or implied, for the execution of the debentures and guarantee. The bank acquired in interest in property under the debenture, it acted in good faith, and it was to be inferred that the company had requested it to forbear from taking steps to enforce repayment of its loan id the debenture and guarantee were provided. Such forbearance amounted to the valuable consideration. It followed that the bank was a 'purchaser' for the purposes of sub-section 44(5) of the 2006 Act.Although a forged corporate document was a nullity in the sense that no one had actual authority on the part of a company to issue a forged document have any effect whatsoever, since there were circumstances in which the company could be stopped from disputing its validity.Foreigners were no different from other fraudulent acts which were capable of binding the principle if the agent acted within his ostensible authority, and accordingly a company was bound by a forgery if a person having the authority to bind the company held out to be  purchaser for valuable consideration that the person who committed the forgery had authority to execute the forged document. On the facts ,the director had ostensible authority to warrant to the bank that all formalities relating to approval and execution of the debenture and guarantee had been duly complied with and that the signatures could be relied on as genuine.

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