The Articles of Association of XYZ Ltd. provides that Board of Directors has authorityto issue bonds provided such issue is authorized by the shareholders by a necessaryresolution in the general meeting of the company. The company was in dire need of funds and therefore, it issued the bonds to Mr. X without passing any such resolutionin general meeting. Can Mr. X recover the money from the company? Decide referringthe relevant provisions of the Companies Act, 2013.
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0yes x can recover the amount as outsiders are not expected to know the internal irregularities of the company which is an exception to doctrine of constructive notice.
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According to Companies ACT 2013 the person is liable to get the money.
As per the Act it is a punishable offence.
The shareholder can sue the directors for contravention of the act.
According to section 27,28,86 company has to pay fine of 25000 which may extend up to 5 lakhs and all the director will be held as defaults for the loss and are liable for imprisonment for the same.
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