RAM BURAN SINGH Vs. MUFASSIL BANK, LTD

JUDGEMENT

(1.) These appeals arise out of proceedings in execution taken by the assignee of certain decrees and the question, for consideration is whether the assignment was valid and binding on the original decree-holder. The decrees in question had been obtained by the Kayasth Trading and Banking Corporation Ltd., against the present judgment-debtors. They were sold by B. Ram Gharib Lal, who was the manager of the company and one of its Directors, on behalf of the company, and the consideration paid by the assignee was credited in the accounts of the corporation.

(2.) The Articles of Association provided that there shall be a manager of the company whose duty shall be to conduct the whole business of the company and to perform all such works and services as may be necessary to carry on the said company or its branches and such as are usually performed by the manager of a Banking Company. They further provided that the said manager shall be authorised to advance loans to the best advantage of the company of such amounts and to expend such sums to keep the bank, its branches and establishment going, as may be prescribed by the Directors from time to time. B. Ram Gharib Lal was appointed the Manager of the company by the Articles of Association, and, by a subsequent resolution of the Board of Directors, dated the 4 April 1917, he was also appointed one of its Directors. On the 9 August 1916 a power of attorney was executed in his favour by the corporation, authorising him to sign and endorse on behalf of the company deeds, bonds and conveyances, and to transfer deoree3, negotiable instruments and other documents the transfer, assignment or endorsement whereof was sanctioned in writing by the Board of Directors or by any of the Directors authorised in that behalf by the said Board.

(3.) There is no evidence to show that any sanction had been granted for the sale of these decrees by the Board of Directors or by any Director authorised in that behalf by the said Board. The sales, however, purported to have been effected on behalf of the corporation, and the real question is whether a third party, who deals with the Manager in the above circumstances, is bound to go behind his apparent authority to enquire whether the Manager had obtained the sanction of the Board of Directors to effect the sales.