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1966 (3) TMI 52 - SUPREME COURTWhether XXIX, rule 3, of the Code, did not provide for any penalty in case the director required to appear in court failed to do so? Whether the court can, as it did in the present case, strike off the defence of the appellant for the default made by its director to appear in court Held that:- There is nothing in Order XXIX of the Code, which, expressly or by necessary implication, precludes the exercise of the inherent power of the court under section 151 of the Code. We are, therefore, of the opinion that in a case of default made by a director who failed to appear in court, when he was so required under Order XXIX, rule 3, of the Code, the court can make a suitable consequential order under section 151 of the Code as may be necessary for the ends of justice or to prevent abuse of the process of the court. It is not necessary in this case to define the exact relationship of a director qua company. The acts of the directors within the powers conferred on them may be binding on the company. But their acts outside the said powers will not bind the company. It is not possible to hold that the director, in refusing to respond to the notice given by the court, was acting within the scope of the powers conferred on him. He is only liable for his acts and not the company. If it was established that the company was guilty of abuse of the process of the court by preventing the director from attending the court, the court would have been justified in striking off the defence. But no such finding was given by the courts below. Thus the orders of the courts below are not correct. Appeal allowed.
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