Section 113 Companies Act: Representation of corporations at meeting of companies and of creditors

Section 113 of Companies Act: Corporate Governance & Statutory Compliance

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

1. A body corporate, whether a company within the meaning of this Act or not, may,

a. if it is a member of a company within the meaning of this Act, by resolution of its Board of Directors or other governing body, authorise such person as it thinks fit to act as its representative at any meeting of the company, or at any meeting of any class of members of the company;

b. if it is a creditor, including a holder of debentures, of a company within the meaning of this Act, by resolution of its directors or other governing body, authorize such person as it thinks fit to act as its representative at any meeting of any creditors of the company held in pursuance of this Act or of any rules made there under, or in pursuance of the provisions contained in any debenture or trust deed, as the case may be.

2. A person authorised by resolution under sub-section (1 ) shall be entitled to exercise the same rights and powers, including the right to vote by proxy and by postal ballot, on behalf of the body corporate which he represents as that body could exercise if it were an individual member, creditor or holder of debentures of the company.

Statutory Defined Terms in this Section: (Click any term for official legal definition)

Company Sec 2(20) Director Sec 2(34) Tribunal Sec 2(90)

Legal Commentary & Landmark Judgments: Section 113

Section 113 of the Companies Act, 2013 authorizes a body corporate that is a member or creditor of a company to appoint a representative by board resolution, deeming such representative an individual member or creditor present in person with full deliberative and voting rights.

Corporate Board Authorization: A body corporate, whether incorporated under the Act or a foreign jurisdiction, may authorize any person by resolution of its Board of Directors or governing body to represent it at any meeting of a company or its creditors.
Statutory Equality with Individual Shareholder: The representative so authorized is deemed in law to be an individual member or creditor present in person; consequently, the representative counts toward the quorum under Section 103, can speak, vote on a show of hands or poll, and appoint proxies.
Evidentiary Proof and Certification: The authority of the representative is established by submitting a certified true copy of the board resolution or power of attorney under the company's common seal or authorized signatories before or at the time of the meeting.

Key Landmark Precedents:

J.K. Paliwal v. Paliwal Steels Ltd., (2008) 141 Comp Cas 61 (CLB): The Company Law Board held that a corporate representative appointed under Section 187 of the 1956 Act (now Section 113) represents the corporate shareholder as an alter ego present in person; an uncertified or invalidly passed board resolution strips the nominee of any standing to vote or count towards quorum.
Swadeshi Polytex Ltd. v. V.M. Rao, (1989) 65 Comp Cas 678 (SC): The Supreme Court held that financial institutions and corporate shareholders participating through Section 187/113 authorizations must strictly produce valid certified extracts of board resolutions, affirming the procedural sanctity of institutional shareholder representation.

Courtroom Practice & Strategic Litigation Guidance:

When challenging resolutions passed at contentious general meetings where institutional or holding company votes tilted the outcome, inspect the certified board resolutions filed under Section 113. Plead lack of quorum or illegal voting if the corporate resolution was passed by an inquorate board, executed by an unauthorized officer, or lodged after the commencement of the meeting contrary to the company's articles.

Section 113: Representation of corporations at meeting of companies and of creditors

Section 113 of Companies Act: Corporate Governance & Statutory Compliance

Legal Commentary & Landmark Judgments: Section 113