Amalgamation preserves existing power of attorney, allowing the transferee bank to rely on prior authorisation without fresh execution.

Under the amalgamation scheme of Syndicate Bank into Canara Bank, an existing power of attorney executed by the transferor bank remained valid and enforceable after merger. Clause 8 preserved subsisting contracts, deeds, agreements, powers of attorney and other instruments, and allowed them to be enforced by the transferee bank as if it had originally been a party to them. On that basis, the employee's authority did not lapse merely because the bank was amalgamated, and no fresh power of attorney was required after the change in name and legal identity.

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Issues: Whether, under the scheme of amalgamation of Syndicate Bank into Canara Bank, the power of attorney executed in favour of an employee of the transferor bank continued to remain valid and enforceable so as to authorise initiation of the present proceedings.

Analysis: Clause 8 of the scheme provided that, unless expressly stated otherwise, all contracts, deeds, bonds, agreements, powers of attorney, grants of legal representation and other subsisting instruments to which the transferor bank was a party, or which were in its favour, would continue in full force and effect against or in favour of the transferee bank. The clause further stated that such instruments could be enforced or acted upon as fully and effectively as if the transferee bank had been a party to them or they had been issued in its favour. On that basis, the earlier authorisation did not lapse on amalgamation and no fresh power of attorney was necessary merely because the bank name changed by virtue of the merger.

Conclusion: The existing power of attorney remained valid after amalgamation and the challenge to the authorised signatory's competence failed.

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