Section 22: Execution of bills of exchange, etc
This section is for determining how a company's authority can be used to execute bills of exchange and other documents on its behalf.
The section, clause by clause
What the section says
In plain terms
(1)A bill of exchange, hundi or promissory note shall be deemed to have been made, accepted, drawn or endorsed on behalf of a company if made, accepted, drawn, or endorsed in the name of, or on behalf of or on account of, the company by any person acting under its authority, express or implied.
A company is responsible for bills of exchange, hundis, or promissory notes made in its name or on its behalf by someone with its authority, whether that authority is explicitly given or implied.
(2)A company may, by writing 2[under its common seal, if any,] authorise any person, either generally or in respect of any specified matters, as its attorney to execute other deeds on its behalf in any place either in or outside India:
A company can give someone authority to sign documents on its behalf, either for specific matters or in general, and this authority can be given in writing, with or without a common seal, and if the company has no common seal, two directors or a director and the Company Secretary can give this authority.
proviso3[Provided that in case a company does not have a common seal, the authorisation under this sub-section shall be made by two directors or by a director and the Company Secretary, wherever the company has appointed a Company Secretary.]
(3)A deed signed by such an attorney on behalf of the company and under his seal shall bind the company 4***.
If an attorney authorized by a company signs a deed on the company's behalf and under their own seal, the company is bound by that deed.
(3)CHAPTER III PROSPECTUS AND ALLOTMENT OF SECURITIES PART I.—Public offer
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Amendment notes
- 1. Subs. by Act 1 of 2018, s. 7, for “an officer of the company” (w.e.f. 9-2-2018).
- 2. Subs. by Act 21 of 2015, s. 6, for “under its common seal” (w.e.f. 29-5-2015).
- 3. The proviso ins. by s. 6, ibid. (w.e.f. 29-5-2015).
- 4. The words “and have the effect as if it were made under its common seal” omitted by s. 6, ibid. (w.e.f. 29-5-2015).
- 5. Ins. by Act 29 of 2020, s. 5, (w.e.f. 30-10-2023).
Referred to by
Search the whole Act, or ask it a question, in the interactive browser.
Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.