Suit filed by corporation

Law required that a person filing legal proceedings on behalf of company, must be authorized by Board of Directors in a duly convened meeting, according to Articles of Association of the company, failing which proceedings before any Court would be nullity

When law required doing of anything in a particular manner, then it must be done in that manner only and all other manners of doing such act could not be resorted

Person who filed suit did not possess authorization from Board of Directors to act and file suit on behalf of plaintiff, and the same was not maintainable

Suit was dismissed in circumstances.

Suit for recovery of money was filed by plaintiff corporation and defendant raised preliminary objection to maintainability of suit on the plea that there was no resolution passed by Board of Directors to file the suit

Validity

Act of compromising the suit or releasing or relinquishing company's claim was dealt with by way of mandatory provision viz. S.196 of Companies Ordinance, 1984, which provided a penalty for non-compliance but with regard to filing of legal proceedings the provision was significantly silent

Such silence was due to the fact that filing law suit / legal proceedings was to be regulated by Articles of Association of plaintiff company

Chairman and Directors, besides other senior officials at the helm of affairs, had given their separate approvals for filing the suit, therefore, it could not be said that suit was incompetently filed or instituted

High Court decided preliminary issues and declared principal officer of plaintiff company duly authorized to file the suit, which had been competently filed in the name of plaintiff company

Objection was overruled in circumstances.

Suit for recovery of money was filed by plaintiff corporation and defendant raised preliminary objection to maintainability of suit on the plea that there was no resolution passed by Board of Directors to file the suit

Validity

Act of compromising the suit or releasing or relinquishing company's claim was dealt with by way of mandatory provision viz. S.196 of Companies Ordinance, 1984, which provided a penalty for non-compliance but with regard to filing of legal proceedings the provision was significantly silent

Such silence was due to the fact that law suit/legal proceedings was to be regulated by Articles and Association of plaintiff company

Chairman and Directors, besides other senior officials at the helm of affairs, had given their separate approvals for filing the suit, therefore, it could not be said that suit was incompetently filed or instituted

High Court decided preliminary issues and declared principal officer of plaintiff company was duly authorized to file the suit, which had been competently filed in the name of plaintiff company

Objection was overruled in circumstances.