Sub-delegation of powers
Y.K. Gupta
(Querist) 30 April 2012
This query is : Resolved
The Board of Directors (BOD) of a public limited company has delegated several powers to its employees through a General Power of Attorney. The powers so delegated, inter alia, include to sub- delegate all or any of the powers to such person(s)as he (employee) may deem fit or may be necessary from time to time.
Now, the question arises whether the powers so delegated are legally O.K. in the eyes of Law?
If not, Why?
Can you please guide me in this matter?
Regards,
Y.K. Gupta
Devajyoti Barman
(Expert) 01 May 2012
Those powers which only the principal can do and no others can not be delegated.
So check whether the acts delegated through POA can be delegated at all or not.
Guest
(Expert) 01 May 2012
Dear Gupta ji,
Powers are normally delegated by the Board through board resolution (not by POA) to the MD with further provision for the MD to redelegate his powers to his subordinate authorities (by designation, not by name), or by virtue of the provisions made in the Memorandum and Articles of Association, as the case may be.
GPA is a source of delegation of some specific power temporarily to any particular employee to do some particular outdoor job on behalf of the principal while dealing with third party, after the accomplishment of that particular job the role of GPA ends. So, such type of GPAs are quite valid in law. However, if the BOD decides to assign some specific nature of jobs on regular basis, say signing of contracts with third parties, in general, on behalf of the company, the Board should not delegate blanket powers through GPA to some particular employee, rather should resort to a Board Resolution in favour of some positional authority by designation, empowered by which the GPA should be issued as a proof for the satisfaction of the outsider third party or to fulfill the requirements of legal documents.
If such GPAs are not supported by appropriate Board Resolution, the same if misused can pose a lot of problems for the company or a particular employee at some later stage, even though such GPAs be legally OK in the eyes of law.
Shonee Kapoor
(Expert) 02 May 2012
Ld. Dhingra has explained the concept in detail.
Regards,
Shonee Kapoor
harassed.by.498a@gmail.com
