Law · Company Law and Banking Operations
A Private Limited Company has two directors/shareholders (50% each) with a joint operation mandate. Following a dispute, Director X submits a new Board Resolution signed by himself and his wife (alleged new director) to change the mandate to 'Either or Survivor'. Director Y sends a legal notice stating the EGM is challenged in the NCLT. What is the safest course of action for the bank?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The bank should immediately close the account and send a Demand Draft for the balance to the registered office.
- 2The bank should suspend operations in the account and inform both parties it will only act on a joint mandate or a specific order from the NCLT.✓
- 3The bank should allow Director X to withdraw funds upon providing a personal indemnity bond.
- 4The bank must follow the latest Board Resolution based on the Doctrine of Indoor Management.
Correct answer
The bank should suspend operations in the account and inform both parties it will only act on a joint mandate or a specific order from the NCLT.
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