1. RoyalBritishBankv.Turquand,(1855)5E&B248.

Thecompanyi.e.Cameron'sCoalbrookSteam,CoalandSwanseaandLoughor
Railway Company became insolvent and Mr. Turquand was the Official
Liquidatorforthesame.Abondfor2000wasgiventotheRoyalBritishBank
because of which the drawings of the company were secured on the current
accountitheld.Thebondcontainedthesealofthecompanyandthesignatureof
thesecretaryandthetwodirectors.Inthesuitagainstthecompany,itwasalleged
that articles of association (registered deed of settlement) provided that the
directorsofthecompanywereempoweredtoborrowanamountthatwouldbe
authorized by a company resolution. A resolution was passed in this respect.
However,noamountwasspecifiedasrequiredbythearticlesofassociation.The
courtheldthatthecompanywasboundbythebondasanoutsiderhadtherightto
presumethattheaffairsofthecompanyarebeingcarriedonaspertheprovisions
ofthearticlesofassociation.

2. Irvinev.UnionBankofAustralia,(1877)2AppCas366

Inthiscaseitwasheldthatsuchinspectionwouldalsoincludethedocumentsthat
havenotbeenfiledbutwhichwouldhavebeenfiledhadthetransactionbeen
carriedoutproperly.

3. Wilsonv.Kelland,[1910]2Ch306

Itwasheldthatthedoctrineofconstructivenoticedoesnotapplytothecontents
ofthedocumentsthathavebeenmerelymentionedorreferredtointhedocuments
filedattheCompaniesRegistry.

4. DeviDittaMalv.TheStandardBankofIndia,(1927)101IC558.

Inthiscase,atwodirectorsofacompanywerecarryingofatransferofshares.
Oneofthedirectorwashimselfthetransfereeand,hence,wasnotqualifiedto
carry out the transfer. The other director was not properly appointed. The
transferorinthiscasehadknowledgeoftheseirregularity.Therefore,thecourt
held that the transfer was invalid and inoperative as the transferor possessed
knowledgewithrespecttotheirregularity.

5. HelyHutchinsonv.BrayheadLtd.,(1967)3AllER70.
Anewlyappointeddirectorofthecompany,inthiscase,enteredintoacontractof
guaranteeandindemnitywiththecompanythroughadirector.Thisdirectorwas
knowinglyallowedbythecompanytoholdhimselfoutashavingtheauthorityto
enterintothetransactionssuchasinthiscase.However,nosuchauthoritywas
given to him. The court held that the company will be liable and the person
enteringintothecontractcannotbesaidtohaveknowledgeofthisirregularity
merelybecausehewasalsoadirectorofthecompany.

6.Rubenv.GreatFingalConsolidated,(1906)AC439.

As per the articles of the company, certificate could be issued only after the
signatureoftwodirectorsofthecompany.However,inthecase,thesecretary
forgedthesignatureofthetwodirectorsandissuedthecertificates.Here,thecourt
heldthatthepersondealingwiththecompany,i.e.holderofthecertificate,cannot
takethebenefitofthedoctrineofindoormanagementasthetransactionwasbased
onaforgeddocumentand,hence,wasvoidabinitio.

7. KreditbankCasselv.SchenkersLtd.,(1927)1KB826.

Abillofexchangedwasdrawnbythemanagerofthecompany.Themanager
statedthatthebillisbeingdrawnonbehalfofthecompany.However,itwas
discoveredlaterthatthepayeeinwhosebehalfthebillwasdrawnwasaperson
whomthemanagerwaspersonallyindebted.Insuchacase,noprotectioncould
beprovidedasthedocumentwasaforgery

8.Dawsonv.AfricanConsolidatedLandandTradingCo.,[1898]1Ch6.Inthis
casethedirectorsontheboardofdirectorswereunqualified.Thesedirectorsmade
callsforamountdueonshares.Suchcallswereheldtobevalidirrespectiveofthe
factthattheyweremadebyunqualifieddirectors.

9. Similarly,inBoschockProprietaryCo.Ltd.v.Fuke,(1906)1Ch148

Aresolutionwaspassedinageneralmeetingofthecompany.Asamatteroffact,
thisgeneralmeetingwasconvenedbydefactodirectors.Nevertheless,thecourt
upheldtheresolutionpassedinsuchameeting

10. ShiromaniSugarMillsLtd.v.DebiPrasad,AIR1950All508.
Inthiscase,theallotmentofshares andsubsequentforfeiturewasmadebya
director of the company. This director had been disqualified from the office.
However, he was unaware of this disqualification would be protected by the
Section.

11. SethMohanLalv.GrainChambersLtd.,AIR1968SC772.

Inthiscase,thedirectorsofthecompanyhadpassedcertainresolutionsinorder
to start a business transaction. Atthe time of passing of the resolution, these
directorswerenotawareofthefactthattheyhadvacatedtheofficebyvirtueof
theprovisionsofthearticlesofassociation.Thecourtheldthattheactofpassing
resolutionandtheresolutionitselfwasvalidasthedirectorshadnoknowledgeof
thevacationandwereactingingoodfaith.

12. BritishAsbestosCo.Ltd.v.Boyd,[1903]2Ch439

Itwasheldthattheactsofthedirectorsdefectivelyappointed(ordisqualified
fromtheofficeornotentitledtovoteorwhohadvacatedtheholdingoffice)are
valid.

13.Mahonyv.EastHolyfordMiningCo.,(1875)LR7HL869.

AcompanywasformedbyWadgeforthepurposeofbuyingminethatwasowned
byhim.Hesoughttobuyitatmuchhigherpricethanitsrealvalue.Therewere
twosubscribersofthearticlesandmemorandumofassociation,HoareandWall.
They subsequently started helping Wadge in direction of the affairs of the
company.Wadgeappointedfourclerksandanindependentperson,McNally.It
was provided by the articles that the first directors ofthe company are tobe
appointedbythesubscribersofmemorandum.Nodirectorwaseverappointed.
Further,Wadge,WallandHoarecontinuedtomanagetheaffairsofthecompany
from its registered office. They also issued a prospectus inviting public to
subscribetothesharesofthecompanyand,accordingly,theyreceivedmoney
fromtheapplicantsoftheirshares.Thismoneywasdepositedintheappellant
bank by Wall, acting as the secretary ofthe company although he was never
appointedtothatpost.Healsowrotetothebanktorequestingtohonourthe
cheques signed on companys behalf by two of the three directors, Wadge,
HoareandMcNally,purportingthatthesamewasaspertheresolutionpassedby
directorsinameeting.Accordingly,thebankhonouredthecheques.However,
atthetimeofwindingup,theliquidatorsuedthebankonthegroundsthatthe
threepersonswereneverappointedtothepostofdirectorand,thus,thebankhas
paidoutthemoneywithouttheauthorityofthecompany.Itwasheldthatthe
threepersonsactingasdirectorswouldbeconsideredsoasiftheywerelawfully
appointedtotheiroffices.

14. Duckv.TowerGalvanizingCo.,(1901)2KB314.

Inthiscase,acompanywasformedbytheproprietorofabusiness.He,alongwith
hiswife,actedasthedirectorsofthecompanythoughtheywereneverappointed
bythesubscribersofthememorandumaswastherequirementofthearticlesof
associationofthecompany.Thesubscribersdidnotevenacquiesceinthemso
actingnordidthesubscribersmakeitappear,inanyway,thatthesaidproprietor
andhiswifewerethedirectorsofthecompany.Thesesocalleddirectorsthen
issueddebentureforthepurposeofsecuringloanincompanysname.Itwasheld
bythecourtthatthedebentureholderwasentitledtobuythedebenturebasedon
theassumptionthatthesaidpersonswerethedirectorsofthecompanybecause
theywereincontrolofthecompanysbusinessandtheyactedasiftheywere
properlyappointeddirectorsofthecompany.

15. ReCountyLifeAssuranceCo.,(1870)5ChApp288.

Asperthefactsofthiscase,thesolecontinuingdirectorofthecompanypurported
toappointnewdirectorstofillthevacantpositiononthecompanysboardof
directors.Itisrelevanttonotethatthearticlesprovidedhimwithnosuchpower
ofappointment.Rather,suchanappointmentwastobemadebytheshareholders
inageneralmeeting.Thisinsurancecompanythenissuedapolicytotheclaimant.
Itwasheldthatthecompanywasliableandboundbythepolicyissuedinitsname
even though there was no evidence to reveal that the directors were properly
appointedbyapersonauthorizedtomakesuchanappointment.Theclaimantis
entitledtomakeanassumptionthattheywerethedulyappointmentdirectorsof
thecompanyduetothemerefactthattheywereincontrolofcompanysbusiness.
16.Morrisv.Kanssen,[1946]1AllER586.Therelevantfactsofthiscaseareas
follows:

Theappellantinthiscasearguedthathewasentitledtothesharesallottedtohim
bytheboardofdirectors.Theboardofdirectorscontainedonememberwhowas
validly appointed, another member who was never appointed to the post of
directorandathirdmemberwhowastheappellanthimself.Itistobenotedthat
thesoletitleofthesecondmembertoactasadirectorwastheminutesofaboard
resolution forhis appointment that was forgedby the first director. The third
memberwasappointedtotheboardbytheformertwodirectorsunderoneofthe
articlesempoweringthemtodoso.Therewasoneothervalidlyappointeddirector
whowasillegallyexpelledfromtheofficebythefirsttwodirectors.Thiswas
donebeforetheappointmentofthethirddirector.Thisotherdirectordidnotplay
anyroleintheallotmentofsharesthattookplaceonlyaftertheappointmentof
thethirddirector.Thethirddirectorwasallottedcertainnumberofsharesandat
this time he knew that the abovementioned other director had contested the
legalityoftheboardthatmadetheallotment.Asperthearticlesofassociation,the
quorumofthedirectorswasfixedattwo.

17.FreemanandLockyerv.BuckhurstParkPropertiesLtd.[1964]2QB480.

InthiscaseMr.FreemanandMr.LockyerbroughtanactionagainstBuckhurst
ParkPropertiesLtd.anditsdirector,ShivKumarKapoor.Theyclaimedunpaid
fees for the architecture work that they had undertaken in order to develop
BuckhurstParkEstateforthecompany.Anydecisionwithregardstopurchasing
andsellingrequiredallfourdirectorstofulfilquorumrequirementsasmandated
bythearticlesofthecompany.ShivKumarhadactedinhissolecapacityinorder
toengagethearchitects,anduponthelanddealsfallingthrough,hedisengaged
them.

18.HelyHutchinsonv.BrayheadLtd.[1968]QB1549.

Inthiscase,HelyHutchinsonbroughtanactionagainstBrayheadLtd.inorderto
recoverthelossesincurredtohimbecauseofthefailureofatakeoverdeal.Sucha
situationarosebecausethedefactoManagingDirectorandalsotheCEOand
ChairmanoftheCompany, Mr.Richards whohad agreedto indemnifyHely
HutchinsonontheconditionofinjectionofmoneyintoHelyscompany,Perdio
ElectronicsLtdrefusedtobindhimselfinthatcontractcitinghislackofauthority
toexecutesuchanindemnity.