Corporate conversion and managing director authority did not defeat the eviction suit; decree sustained.

A company's conversion into a public company by operation of law did not invalidate a pending eviction suit or the resulting decree, because the change in corporate status left its rights and liabilities intact. The court also held that a managing director could institute the suit on the company's behalf where the action was incidental to the company's management and was brought for its benefit, even without separate board authorisation. The eviction decree was therefore sustained, and the tenants were granted time to vacate and comply with the damages direction.

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Issues: (i) whether the conversion of the plaintiff company into a public company by operation of law affected the maintainability of the suit and the decree for eviction, and (ii) whether the managing director had authority to institute the suit on behalf of the company.

Issue (i): whether the conversion of the plaintiff company into a public company by operation of law affected the maintainability of the suit and the decree for eviction.

Analysis: The company was found to have crossed the prescribed turnover and, by legal fiction under the company law provisions, became a public company. The change in status did not destroy the company's rights or obligations and did not render any legal proceeding by or against it defective. The suit, therefore, was not liable to fail merely because of the change in corporate character.

Conclusion: The conversion of the company into a public company did not affect the maintainability of the suit or the eviction decree.

Issue (ii): whether the managing director had authority to institute the suit on behalf of the company.

Analysis: The power of a managing director under the Companies Act was treated as including substantial powers of management, subject to the excluded routine administrative acts. Institution of a suit on behalf of the company was held to be incidental to the management of its day-to-day affairs, especially where the suit was for the company's benefit and no intra-board dispute was shown. The objection based on absence of separate board authorisation was therefore rejected.

Conclusion: The managing director had authority to institute the suit.

Final Conclusion: The eviction decree was sustained and the tenant-appellants were only granted time to vacate and comply with the direction for damages.

Ratio Decidendi: A change in a company's corporate status does not invalidate pending legal proceedings, and a managing director may institute a suit on behalf of the company when such action falls within the company's substantial powers of management and is for its benefit.

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