Authority to create debentures and charges failed where managing agents lacked power and no enforceable security was formed.

Managing agents lacked authority to bind the company to issue debentures or create a charge, and any promise they made could not operate as a valid contractual obligation against the company. The later tripartite arrangement was not supported by a binding board resolution and did not show the creditor's assent to an enforceable security. On those facts, no completed or enforceable agreement to create a charge was established, and the equitable doctrine treating as done what ought to be done could not apply where the underlying obligation was unauthorized. The creditor was therefore not entitled to specific performance or a first charge over the company's assets.

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Issues: Whether the managing agents had authority to bind the company to issue debentures or create a charge in favour of the creditor, and whether the creditor could enforce such promise by specific performance or claim a first charge on the company's assets.

Analysis: The managing agents had no power under section 87G to issue debentures or to delegate such power, and a promise made by them in the receipt could not be enforced as a valid contractual obligation against the company. The subsequent tripartite arrangement was not adopted by a binding resolution of the board and did not show assent by the creditor to any enforceable security. The facts therefore did not establish any completed or enforceable agreement to create a charge, and the equitable principle that treats as done what ought to be done could not apply where the underlying obligation itself was unlawful or unauthorized.

Conclusion: The creditor was not entitled to specific performance or to a first charge over the company's assets, and the claim failed.

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