Equity Bank Tanzania Limited vs Dar Lux Company Limited & 4 others, commercial case no 02 of 2023.

THIs cas was raised preliminary objection as counter claim was not included  body resolutoon to that effect:

Issue was whether a body resolution is mandatory when suing as company?

 In all the above decisions, it has been held that a board resolution is a mandatory requirement for institution of a suit in the name of the company and its absence renders the proceedings incompetent before the court. Section 147 (1) of the Companies Act from which the requirement

for board resolution is derived provides;

147.-(1) Anything which in the case of a company may be done

(a) by resolution of the company in genera! meeting, or

(b) by resolution of a meeting of any class of members of the company, maybe done, withouta meeting andwithoutanyprevious

notice being required, byresolution in writing signedby or on behalf of all the members of the company who atthe date ofthe resolution would be entitled to attend and vote at such meeting:

Provided that, nothing in this section shall apply to a resolution under section 193(i) removing a director before the expiry of his

period of office or a resolution under section 170(7) removing an auditor before the expiry ofhis term ofoffice.

reasoned that a board resolution is intended to avoid unilateral decision of a few directors who may decide to institute legal proceedings under the company’s name without consent of other directors or shareholders thereby exposing them to detrimental decisions which may possibly result from the case.

In the event, since the present suit (counter claim) was instituted by a company without a board resolution, it necessarily follows that it is incompetent before the Court.