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Chirag (Professional) 27 November 2019
Outsiders( Banks and Financial Institutions) or any other party through which company enters into transaction, Will not obliged to see anything which is not in public domain, and on the basis of it, their txn can't be considered as void, Example like when BOD authorise Mr. A (Director) to sign on behalf of Company, he submits CTC Of board resolution to Other party, Now in actual No board meeting happens neither He was authorised ,which was exposed later, Then Other party who relying on the authorisation & on CTC ,his contract can't be repudiated on the basis that ,Mr. A signs without authority of board, Because it's an internal matter.....
Contarction of the above rules is "Doctrine of Constructive Notice "