A company's Board of Directors can delegate the power to institute and defend suits to its officers, and an appeal filed by an officer under such delegated authority is competent.

A.L.BAHRI, J.

1. This revision petition is directed against order of Additional District Judge, Ambala dated 1/02/1989 dismissing the appeal filed by the present petitioner, as incompetent.

2. Sardar Chand filed a suit against the Hindustan Petroleum Corporation Limited (hereinafter referred to as the Corporation) for declaration that he was entitled for letter of intent for retail outlet dealership of H.S. Diesel near village Mandhar and that withdrawal of the intent letter dated 3/07/1985 vide letter dated 27/11/1986 by defendant No. 2 was illegal and void and for mandatory injunction directing the defendants to revalidate letter dated 3/07/1985. Along with the suit, an application for interim order was filed. The trial Court on 1/10/1987 directed the defendants to maintain status quo till further orders. Against the aforesaid order, an appeal was taken to the Additional District Judge, Ambala wherein an objection was taken to its maintainability, which resulted in passing of the impugned order.

3. In the revision petition, an application under O.41, R.27 of the Code of Civil Procedure had been filed in order to take into consideration the documents Annexures A/1 to A/4. Notice of this application was given to the respondents. This application is also being disposed of.

4. The question for consideration is as to whether Shri J. Sethi, who was attorney of the Corporation could take a decision and file the appeal before the lower appellate Court or not. If it is held that he had the power to decide to file the appeal then the appeal before the lower appellate Court would be competent and if it is held that he was not the authority to decide, but the authority vested in the Board of Directors of the Corporation and there being no resolution passed by the Board of Directors, Shri J. Sethi, could not file the appeal although he may be competent to sign the memorandum of appeal. Such a question was to be determined on going through the Memorandum and Articles of Association of the Corporation as well as different powers of attorney executed on behalf of the Corporation. Thus, it has been considered necessary for just decision of the case to take into consideration the documents accompanying the application filed under O.41, R.27 of the Code of Civil Procedure. The application is, therefore, allowed.

5. Article 147 of the Memorandum and Articles of Association provides powers of Directors of the Board. Under Art. 147(A) the powers of the Directors/Chairman and Managing Director can further be delegated Art.148 contains certain powers of the Board. Sub-sec. (7) of Art. 148 refers to the subject of suits and it reads as under :-

"Art. 148(7) "To institute, conduct, defend, compound, or abandon any legal proceedings by or against the Company or its officers, or otherwise concerning the affairs of the Company, and also to compound and allow time for payment or satisfaction of any debts due to, and of any claims or demands by or against the Company, and to refer any differences to arbitration, and observe and perform any awards made thereon."

6. The Board of Directors, thus, was the authority under the Articles of Association, as referred to above to take a decision regarding institution or defending the suits. The power was delegated to Sh. Mohinder Kumar Bagai vide power of attorney Annexure A / 2., now produced. Mr. M. K. Bagai was Director Marketing. Under this attorney, Mr. Bagai was further authorised to delegate the aforesaid powers mentioned therein to officer in the Marketing Division. This action of giving authority to Mr. M. K. Bagai was rectified by the Board of Directors in its meeting held on 30/09/1981 vide resolution A-8, copy Annexure A-1. Subsequently, Mr. Bagai delegated the power to Sh. J. Sethi, copy of which was produced along with memorandum of appeal filed in the lower Appellate Court. Copy has been shown and produced in this Court as well. This authority was executed on 16/09/1983. Under this authority,