Corporate authority and full disclosure are essential: unauthorised suit filing and suppressed facts can invalidate interim maritime relief.

Company litigation requires proper corporate authority: where the articles place the managing director under board control, institution of a suit and appointment of a constituted attorney need specific board authorisation, and proceedings commenced without a board resolution are unauthorised. Corporate notices and resolutions are ineffective where the issuing officer lacks power under the articles and valid service and convening are not proved. Ex parte maritime relief will also be set aside where material facts about company control, internal disputes, and the scope of the underlying agreement are suppressed or misstated, because incomplete disclosure vitiates interim orders and supports vacatur of arrest and ancillary relief.

---

---

Issues: (i) whether the managing director could institute the suit and appoint a constituted attorney without specific authority from the board of directors or a valid resolution of the company; (ii) whether the notice convening the general meeting and the resolutions passed thereat were valid; (iii) whether the arrest order and interim relief had been obtained by suppression of material facts and false statements.

Issue (i): whether the managing director could institute the suit and appoint a constituted attorney without specific authority from the board of directors or a valid resolution of the company.

Analysis: The Articles of Association made the managing director's powers subject to the control and supervision of the board and consultation with the chairman. The Court held that, under the Companies Act, 1956, the board alone could authorise institution of litigation on behalf of the company unless that power was specifically conferred. In the absence of any board resolution, the managing director could not unilaterally commence proceedings or appoint an attorney for that purpose.

Conclusion: The suit was instituted without authority and that objection was upheld in favour of the petitioner.

Issue (ii): whether the notice convening the general meeting and the resolutions passed thereat were valid.

Analysis: The Court found that the secretary had no independent power under the Articles to issue the notice. It further found that the alleged meetings were not properly convened, notice was not proved to have been served on the chairman and his group, and the purported resolutions were passed in circumstances rendering the meetings ineffective. The Court therefore treated the notices and the resulting resolutions as legally ineffective.

Conclusion: The notices, meetings, and resolutions were held to be void and of no legal effect in favour of the petitioner.

Issue (iii): whether the arrest order and interim relief had been obtained by suppression of material facts and false statements.

Analysis: The Court held that the applicant had not disclosed material facts bearing on control of the defendant company, the internal disputes within the plaintiff company, and the limited scope of the agreement relied upon. It also found that the agreement did not impose the alleged obligation on the vessel owner to transfer the vessel, and that the arrest was secured on an incomplete and misleading presentation of facts. On that basis, the Court concluded that the ex parte order could not stand.

Conclusion: The arrest order and interim relief were liable to be vacated for suppression of material facts and false assertions, in favour of the petitioner.

Final Conclusion: The proceedings failed for want of proper corporate authority and for non-disclosure of material facts, and the vessel was directed to be released with consequential reliefs to the petitioner.

Ratio Decidendi: A company litigation cannot be validly instituted without proper corporate authorisation, and ex parte maritime relief obtained on a materially incomplete or misleading disclosure is liable to be set aside.

---