AIR 2007 DELHI 157 ::2007 (4) All LJ NOC 722 ::2007 (5) ABR (NOC) 745 (DEL) ::2007 (4) AKAR (NOC) 540 (DEL) ::2007 AIHC NOC 413 ::2007 CLC 1407 ::(2007) 139 DLT 688 ::(2007) 78 CorLA 363 ::(2007) 3 Pun LR 14

Delhi High Court

Hon'ble Judge(s): Pradeep Nandrajog , J

(A) Contract Act (9 of 1872) , S.230— Damages for breach of contract by company - Liability of Director of company - Director of company cannot be treated as agent of company in conventional sense of an agent vis-a-vis third parties. Directors of companies have been described as agents, trustees or representatives of the company because of the fact vis-a-vis the company they act in a fiduciary capacity. They perform acts and duties for benefit of company. Thus directors are agents of company to the extent they have been authorised to perform certain acts on behalf @page-Del158 of the company. But directors of a company owe no fiduciary or contractual duties or any duty of care to third parties who deal with the company. Directors of a company are referred to as agents of the company in the context of their fiduciary duty to the company and therefore if they derive any personal benefit while purporting to act on behalf of the company, they will be liable to the company and its shareholders. But the directors cannot be treated as acting as agents of the company, in the conventional sense of an agent, vis-a-vis third parties. As conventionally understood, a person acts as an agent for a principal and represents the principal before third parties. Such contracts which are concluded by the agent on behalf of his principal with third ....