Apparent company authority and valid charge filings upheld, with winding-up proceedings not defeating the Corporation's security.

Mortgages executed by the companies were upheld as binding because the copied resolutions were corroborated by the surrounding circumstances, including execution by the managing director, directors acting as guarantors, and use of the common seal; non-production of the original minutes books did not negate apparent board authority. The charge in favour of the Corporation was not void against the appellant, since the relevant filing requirement was satisfied within extended time and later registration did not defeat the charge; pendency of winding-up proceedings did not attract section 536(2) on these facts. The supplementary instrument relating to machinery was treated as a pledge of movable property not requiring registration, and the sale order made under the State Financial Corporations Act remained effective despite the later winding-up petition.

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Issues: (i) whether the mortgages executed by the companies were binding despite non-production of the original minutes books and the challenge to the authority of the managing director; (ii) whether the charge created in favour of the Corporation was invalid against the appellant because of delay in filing and registration of the charge and pendency of winding-up proceedings; and (iii) whether the supplementary instrument relating to the press and the order for sale passed under the State Financial Corporations Act were invalid or inoperative against the co-mortgagor company.

Issue (i): whether the mortgages executed by the companies were binding despite non-production of the original minutes books and the challenge to the authority of the managing director

Analysis: The resolutions produced, though only in copy form, were supported by surrounding circumstances, including the execution of the mortgage deeds by the managing director, the participation of directors as guarantors, and affixation of the common seal. Non-production of the minutes books did not by itself disprove the existence of board meetings or resolutions. The Court applied the principle that outsiders dealing with a company are entitled to rely on apparent authority and are not bound to investigate internal management where the transaction is within the company's powers.

Conclusion: The mortgages were binding on the companies, and the challenge based on alleged absence of board resolutions failed.

Issue (ii): whether the charge created in favour of the Corporation was invalid against the appellant because of delay in filing and registration of the charge and pendency of winding-up proceedings

Analysis: The relevant date for the charge provisions was the filing of the particulars, not the later ministerial act of registration. Time had been extended by the court under the charging provisions, and registration thereafter did not defeat the charge. The appellant, being only an unsecured creditor, could not invoke the protection meant for rights acquired in respect of the charged property. The pendency of winding-up proceedings did not invalidate the charge, and section 536(2) had no application on the facts.

Conclusion: The charge was not void against the appellant, and the prayer for cancellation of registration failed.

Issue (iii): whether the supplementary instrument relating to the press and the order for sale passed under the State Financial Corporations Act were invalid or inoperative against the co-mortgagor company

Analysis: The supplementary document, though described as a mortgage, effectively dealt with machinery and was treated as a pledge of movable property, which did not require registration. The order for sale had been passed in proceedings commenced before the winding-up proceedings, and the special scheme of the State Financial Corporations Act prevailed. The prior initiation of the Corporation's proceedings preserved the validity of the sale order notwithstanding the later winding-up petition.

Conclusion: The supplementary transaction and the sale order were valid and enforceable against the co-mortgagor company.

Final Conclusion: The appeals were rejected because the Corporation's security, charge, and sale proceedings were upheld in law, and the appellant failed to establish any ground for interference.

Ratio Decidendi: A third party dealing bona fide with a company is entitled to rely on apparent board authority and is not bound to inquire into internal management, and a charge validly supported by extended filing time and registered thereafter is not defeated as against an unsecured creditor by subsequent winding-up proceedings.

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