Cause of action

Nile Bank (U) Ltd v Bakunda (U) Ltd (CIVIL SUIT NO. 600 OF 1992) [1993] UGHC 30 (19 January 1993);

Flynote: 

Search Summary: 

This was an application for orders that an unconditional leave may be granted to the applicants/defendants to defend the suit basing on grounds that the action is improperly instituted as the respondent/plaintiff has no valid cause of action and that the applicants/ defendants have investigated respondents/plaintiffs claim in the suit and have not found any evidence of the applicants board having sanctioned the transaction in question and no record are available to that effect.  

Headnote and Holding: 

The court considered that the managing director of the applicant company was the one who opened the account with the plaintiff bank in the name of the company and drew cheques on that account on behalf of the company and all these have not been disputed. The dispute was only that he was not authorized and there is no evidence in the office of the applicant company showing that the company board authorized him. Court hence considered this to be an internal matter of the company which does not affect the plaintiff as an outsider dealing with the managing director who seemed to have all the authorities.

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