https://www.taxtmi.com/caselaws?id=96764 An equitable mortgage entered into through interested directors was voidable where the mortgagee had, or must be taken to have had, knowledge of the conflict and the borrowing company's lack of an independent board. The indoor management rule did not protect the mortgagee in those circumstances, so the liquidator could avoid the security and the secured claim failed. By contrast, advances made through the intermediary company remained recoverable in liquidation despite an internal borrowing ceiling in the articles, because the loans were not ultra vires the company, the money was received and applied for corporate purposes, and the account was not reopened to exclude interest on excess advances. The unsecured proof of debt succeeded. en-us Fri, 11 Mar 1938 00:00:00 +0530 Tue, 10 Jan 2012 18:21:07 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=96764 An equitable mortgage entered into through interested directors was voidable where the mortgagee had, or must be taken to have had, knowledge of the conflict and the borrowing company's lack of an independent board. The indoor management rule did not protect the mortgagee in those circumstances, so the liquidator could avoid the security and the secured claim failed. By contrast, advances made through the intermediary company remained recoverable in liquidation despite an internal borrowing ceiling in the articles, because the loans were not ultra vires the company, the money was received and applied for corporate purposes, and the account was not reopened to exclude interest on excess advances. The unsecured proof of debt succeeded. Case-Laws Companies Law Fri, 11 Mar 1938 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=96764