Page 23 - DCOM106_COMPANY_LAW

Company Law

Notes Use of Seal Outside India (s.50)

Where a company has any business or transaction in a place outside India, a facsimile (exact
reproduction) of the common seal may be kept there. The seal should also contain the name of
the place where the seal would be used. For such use, there must be power in the articles.
A person must be properly authorised to use the seal, who shall sign his name and also put the
name of the place and the fact that he has been authorised to do so by the specified resolution.
As per s.48, a company may, by writing under its common seal, empower any person, either
generally or in respect of any specified matters, as its attorney, to execute deeds on its behalf in
any place either in or outside India [s.48(1)].
It further provides that a deed signed by such an attorney on behalf of the company and under
his seal where sealing required, shall bind the company and have the same effect as if it were
under its common seal[s.48(2)].

2.2.9 Company may sue and be sued in its own name

Another fallout of separate legal entity is that the company, if aggrieved by some wrong done
to it may sue or be sued in its own name. In Rajendra Nath Dutta v. Shibendra Nath Mukherjee
(1982) (52 Comp. Cas. 293 Cal.), a lease deed was executed by the directors of the company
without the seal of the company and later a suit was filed by the directors and not the company
to avoid the lease on the ground that a new term had been fraudulently included in the lease
deed by the defendants. Held that a director or managing director could not file a suit, unless it
was by the company in order to avoid any deed which admittedly was executed by one of the
directors and admittedly also the company accepted the rent. The case as made out in the plaint
was not made out by the company but by some of the directors of the company and the company
was not even a plaintiff. If the company was aggrieved, it was the company which was to file the
suit and not the directors. Therefore, the suit was not maintainable.

Self Assessment

5. Consider the following statements:

A statutory auditor of a public limited company claims that he has the following legal
rights in relation to his duties:
(i) Right to refuse to make a report

(ii) Right of access to books of accounts and registers
(iii) Right to seek explanation from directors and officers -
(iv) Right to make statement in the general meeting

Of the above statements:
(a) (i), (ii) and (iii) are correct
(b) (i), (ii) and (iv) are correct
(c) (i), (iii) and (iv) are correct
(d) (ii), (iii) and (iv) are correct

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