Power Of Attorney Need Not Name Officers Individually, Nomination By Designation Sufficient: NCLAT Delhi
Pranav B Prem
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, has held that a power of attorney (POA) executed by bank officers nominated by their designation, rather than by name, is legally valid for instituting proceedings under the Insolvency and Bankruptcy Code, 2016. The bench comprising Justice N. Seshasayee (Member – Judicial) and Arun Baroka (Member – Technical) set aside an order of the Adjudicating Authority (NCLT, New Delhi), which had dismissed an application filed by Indian Bank seeking amendment of Form-1, solely on the ground that the officer instituting the proceedings was not appointed by a validly executed power of attorney.
Background of the Case
Indian Bank had filed an application before the NCLT seeking amendment of Form-1 in a Section 7 IBC petition. The NCLT dismissed the application on maintainability without considering its merits, reasoning that the General Manager (HRM) and Deputy General Manager (HRM) who executed the POA had only been nominated by designation and not by their personal names, and hence lacked authority.
Challenging this, the appellant contended that the Board Resolution dated November 6, 2014, authorized the Chairman and Managing Director, or in his absence the Executive Director, to nominate officers competent to issue POAs. Pursuant to this authority, proceedings dated November 24, 2014 nominated the General Manager (HRM) and Deputy General Manager (HRM) for this purpose. In 2023, these officers executed a POA in favour of Shri Navjeet Nirala, Chief Manager, authorizing him to prosecute litigation on behalf of the bank.
Appellant’s Contentions
Counsel for the appellant relied on the Supreme Court’s ruling in United Bank of India v. Naresh Kumar [(1996) 6 SCC 660], submitting that if the NCLT’s reasoning was accepted, it would paralyze the functioning of banks, as the Board would be required to convene each time to nominate officers by name. Nomination by designation, it was argued, provides certainty as to who has authority to execute the POA.
Observations of the Tribunal
The Tribunal held that the NCLT’s interpretation was flawed. It observed that a careful reading of the 2014 Board Resolution made it clear that the Chairman or Executive Director was empowered to nominate officers who could issue POAs. Pursuant to this, the General Manager and Deputy General Manager (HRM) were duly authorized by virtue of their office.
Emphasizing the legal position, the bench stated: “The document of power of attorney is a document appointing an agent, and here what is significant is whether the person who had executed a power of attorney has valid authority in law to execute it. Any authority holding a specific office for the time being can be appointed for the said purpose. There is no legal bar for vesting an authority to execute power of attorney document on a person by virtue of the office he or she holds.”
The NCLAT held that the POA executed in favour of Shri Navjeet Nirala was properly and validly executed. Accordingly, it allowed the appeal, set aside the NCLT’s order dated March 25, 2025, and remanded the matter back to the Adjudicating Authority to hear and dispose of the application on merits.
Appearance
For Appellant: Mr. Gautam Awasthi, Mr. Ayush Choudhary, Mr. Devanshu Yadav, Advocates
For Respondent: Mr. U.K. Chaudhary, Sr. Advocate with Mr. V. Anush Raajan, Mr. Mansumyer, Mr. Pradyumn Yadav, Advocates
Cause Title: Indian Bank V. M/s. Aman Hospitality Private Limited
Case No: Company Appeal (AT) (Ins) No. 569 of 2025
Coram: Justice N. Seshasayee [Member – Judicial], Arun Baroka [Member – Technical]
