Law:

Section:

(a) Company---Institution of suit or taking legal action by a company--Authorisation---Memorandum and Articles of Association--¬Nature and status---If a Director has been authorized specifically by the Memorandum and Articles of Association to manage the business of the Company and to institute the, legal proceedings then there is no need to pass a separate resolution by the Board of Directors for instituting the suit and authorizing the same person who has already been authorized by Memorandum and Articles of Association to institute the suit---Principles. A company, which is a juristic person and not natural person, can administer its business affairs by its Board of Directors. A company can institute the suit by passing a resolution and by authorizing any of its officers/ directors to file, sign and verify the same. However, even if any person or director has been authorized to institute suit, sign and verify plaint by Articles of Association, still instituting suit, company ought not to have passed fresh resolution in this regard. In the present case the Chief Executive of the plaintiff-Company had been authorized by the Memorandum and Articles of Association with almost all the powers to manage the affairs of the company including powers to control the management of the business of the company with full power to do all acts, deeds and things deemed necessary, proper and expedient for carrying on the business and concerns of the company and to exercise all powers, authorities and discretions of the company except only such of them as by the Companies. Ordinance for the time being in force, were expressly directed to be exercised by the Board of Directors. To institute a suit or take legal action for the recovery of outstanding debts of the company is also one of the main affairs of the company and if a director has been authorized specifically, by the Memorandum and Articles of Association to manage the business of the company and to institute the legal proceedings then there is no need that a separate resolution ought to have been passed by the Board of Directors for instituting the suit and authorizing the same person who has already been authorized by…

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