Indoor management rule does not protect a director who participates in an unauthorised allotment of shares.

Section 143 of the Companies Act 1929 and article 88 of Table A validate defects or irregularities in appointment or qualification, but not a complete absence of appointment. They cannot be stretched to legitimise a usurpation of office by a person who was never duly appointed, and acts done in such circumstances remain unvalidated. The rule in Turquand's case protects outsiders dealing in good faith with a company on the assumption that internal requirements have been complied with, but it is unavailable to a director or de facto director who himself participates in the unauthorised transaction. A director cannot rely on the indoor management rule to validate his own unauthorised act.

---

---

Issues: (i) Whether section 143 of the Companies Act, 1929 and article 88 of Table A validated the acts of persons who were not duly appointed directors, including a director whose office had expired and a person who had never been appointed at all. (ii) Whether a person who himself acted as a director in an unauthorised allotment of shares could invoke the rule in Turquand's case to treat the allotment as valid.

Issue (i): Whether section 143 of the Companies Act, 1929 and article 88 of Table A validated the acts of persons who were not duly appointed directors, including a director whose office had expired and a person who had never been appointed at all.

Analysis: The provision and the article were held to cure defects or irregularities in appointment or qualification, but not a total absence of appointment. A distinction was drawn between a defective appointment and no appointment at all. Their language could not be stretched to override the substantive rules governing appointment of directors or to legitimise a fraudulent assumption of office.

Conclusion: The provision and the article did not apply, and the impugned acts of the persons concerned were not validated.

Issue (ii): Whether a person who himself acted as a director in an unauthorised allotment of shares could invoke the rule in Turquand's case to treat the allotment as valid.

Analysis: The rule protects outsiders dealing in good faith with a company and assuming that internal acts have been duly performed. It does not protect a director or de facto director who himself purports to act for the company in the very transaction said to be unauthorised. A director cannot rely on a presumption that what he himself wrongly did was rightly done.

Conclusion: The rule in Turquand's case was unavailable to the appellant, and the allotment could not be upheld on that basis.

Final Conclusion: The appeal failed on both grounds and the respondent's challenge to the disputed directorship and share allotment succeeded.

Ratio Decidendi: A statutory or articles-based validating provision for defective appointment does not cover a complete absence or usurpation of office, and the indoor management rule cannot be invoked by a director to validate an unauthorised act in which he himself participated.

---