Saundarya Sinha

The director of the company was aware of a fact which would jeopardise the transaction, and still chose not to disclose it, while the other directors did nothing to intervene either. The Court held that the liability could be extended to the company as well for the acts of the directors of the company, since they were the minds and the hands through which the company acted.

Simply because they are the directors, does not mean that they are supposed to be held liable for every mistake that they are making in the course of their conduct. This is true even if the directors may have avoided the mistake altogether had they taken slightly more care of their actions.

The position of the directors is indeed an important issue for the assessment liabilities of the directors. In this case, the position of the Director of the Bank was an important aspect for consideration. After the death of the director, the Court held that the claim made against the legal representatives of the director was barred by limitation, and therefore untenable before the court of law.

This case states that the Doctrine of Constructive Notice mandates that before entering into a transaction with a company, one should be well aware of the rights and obligations of the directors of the company, all the more so, when the concerned documents are available for public access.

After their continuous absence and non-responsiveness to the notices of the Court, the court allowed plaintiff’s application for a default judgment The court allowed for recovery only under one statute because the offences under the two statures were essentially the same, and thus, allowing recovery under both the statutes would have been nothing less than ‘double recovery’ from the defendants. The Court pondered over damages under three heads – statutory damages, enhanced damages, and other fees related to Attorney’s costs and other costs so incurred.

A company is not bound by any contract that it may have entered into before the company was incorporated. this case clarified that the promoters can be held personally liable in the case where they are the one who have entered into the contract on behalf of the company, since the company could not have adopted or subsequently ratified the contract. In itself, the document would never be binding, since the company never existed in the first place.

There was no one certain test which could be used to ascertain whether a person was a de facto director or not. Being a director of a sole corporate director does not mean that the fiduciary duties of being the director of the other companies underlying are imposed on the person as well.

The primary concern, in this case, was the restrictions being made on the trade of an individual. Moreover, this case is also known for elaborating the concept of lifting of the corporate veil to uncover fraud or a sham and hold the directors of the company personally liable for the wrongdoings done by them under the garb of the corporate identity.

The Article deals with the analysis of the rulings established by the Scottish Court of Sessions in Fergusson versus Wilson. The article gives a brief background about the facts of the case. It also deals with the rulings established and an analysis of those rulings in the light of the established jurisprudence on the issue.

The doctrine of ultra vires against third parties has been mostly done away with. This doctrine is only relevant to ascertain the object of any company who has registered the object clause as a part of its MOA. The case in itself holds little or no relevance in any other scenario due to changes made by the Companies Act of 2006.