Who can be a signatory for a company in bank accounts?

Directors of private companies are much less restricted in their financial dealings with their company and need  not disclose any information about such arrangements in the accounts.The authority of signatures as per their understanding of directors & submit  their consent to the banking authorities

So, this means that such an arrangement is perfectly legal? Please clarify.

If the Board of Directors pass any Resolution in that regard then yes.

 A resolution enables any two persons  to sign the cheques. Remember Managers and Secretaries etc. are signing cheques for public and private limited companies. Directorship is not mandatory for signing cheques. 

Board of Directors can authorise any persons to sign the cheuqe by passing of resolution.

 A shareholder Director can be authorised by the Board of Directors to be a authorised signatory for bank operations. Only thing that is to be ensured is the Board Resolution is duly passed with the valid quorum, usually fixed by the Articles of Association of the Company.

Vasudevan

 Remember in 138 cases, it is ANY PERSON. I think it covers a person who is not even in the employ of the company but authorised to sign the cheque.

I agree with Mr. Anil Agrawal...........Board of Directors can authorise ANY PERSON to sign the cheuqe by passing of resolution whether he/she  is in employement or not.

 To be remembered.

A person authorised by the Board to sign the cheques becomes liable u/s 138 if it is proved that he was responsible to the company for its day to day working even though he may not be a director/employee.