Judgment :- V. RAMASWAMI J. 2nd and 3rd defendants are the appellants. The suit was filed by the plaintiff, 1st respondent, for the recovery of a sum of Rs. 4, 000 due under a promissory note dated August 12, 1960. The promissory note was executed by the 1st defendant. The 3rd defendant Sri Rajagopal Transports Private Ltd. was incorporated on April 7, 1959, with the 1st defendant and his two wives as its only shareholders. The 1st defendant by a resolution dated April 8, 1959, was appointed as the managing director of the company. The suit promissory note was executed by the 1st defendant on August 12, 1960, and he described himself as the proprietor of Sri Rajagopal Transports P. Ltd. Subsequently, on July 29, 1961, all the shares of the company were transferred in the name of the 2nd defendant and his son, Rajaram. It was the case of the plaintiff that the money was borrowed by the 1st defendant for the purchase of a bus for the company and that when the shares were transferred to the 2nd defendant, the 2nd defendant also took over the liabilities on the promissory note. The 2nd and 3rd defendants resisted the claim and contended that the suit promissory note has not been executed in the name of, or for and on behalf of, the 3rd defendant-company and that, therefore, the suit was not maintainable against the 2nd and 3rd defendants. The second contention was that there was no resolution of the company as required by section 292(c) of the Companies Act, 1956A similar question came up for consideration, before a Full Bench of this court in Sivagurupatha v. Padmavathi. It was held in that case that when, in a promissory note written in Indian language, the person after giving his own description adds that he is the agent of another it means that he is acting as the other's agent in the matter of execution of the document. This decision concludes the point against the appellants. The next contention of the appellants is that there is no resolution by the board of directors of the company in terms of section 292(c) of the Companies Act enabling the managing director to borrow money on promissory notes. Apart from the fact that this plea had not been raised in the written statement, there is no substance also in this contention. Apart from the fact that this plea had not been raised in the written statement, there is no substance also in this contention. It is not disputed that the memorandum and articles of association allow borrowing by the directors. The transaction is a loan which is, therefore, authorised under the memorandum and articles of association. Article 21 of the articles provides that the directors may raise or borrow money on promissory notes. By resolution 4 of exhibit A-2, which is a certified copy of the registration of resolutions, the 1st defendant was appointed as the managing director. Resolution 6 vested in him full powers for the management of the company's affairs and also authorised him to sign all papers of the company. The transaction is, therefore, one which could be entered into on behalf of the company by the first defendant. In such a circumstance, the creditor is entitled to presume that all formalities required in connection therewith have been complied with. A bona fide creditor in the absence of any suspicious circumstance is also entitled to presume its existence. The creditor being an outsider or a third party so far as the company is concerned is entitled to proceed on the assumption of the existence of such a power. That in fact the money was utilised for the purpose of the company is not in dispute and the 2nd defendant himself has made a part payment towards this promissory note. In this connection it is also useful to refer to the decision of the Allahabad High Court in L. R. Cotton Mills Co. v. J. K. Jute Mills Co. It was held in that case that even where there was no actual resolution authorising a director to enter into a transaction on behalf of the company either by the board of directors or by the board of managing agents, a claim of a creditor could not be affected if the terms of its memorandum and articles of association authorised such a transaction. It was also held that in such a case the person negotiating with a company is entitled to presume that all the formalities in connection therewith have been complied with. There is no dispute in this case as to the bona fides of the plaintiff. It was also held that in such a case the person negotiating with a company is entitled to presume that all the formalities in connection therewith have been complied with. There is no dispute in this case as to the bona fides of the plaintiff. This contention of the appellants is therefore unsustainable.It is next contended by the learned counsel for the appellants that the 2nd defendant had not taken over the liability under the promissory note when the shares were transferred to him and the suit was also barred by lmitation. As already stated that the money was utilised for the purpose of the company was not in dispute. In fact the 2nd defendant himself has paid a sum of Rs. 280 towards the promissory note on August 24, 1962, and has made an endorsement in his own hand in the promissory note describing himself as the managing director of Sri Rajagopal Transport Private Ltd. This endorsement would save the limitation as the suit itself was filed on August 24, 1965. The finding of the courts below also is that the 2nd defendant had taken over the liability under the promissory note when he purchased the entire shares of the company. For the foregoing reasons, the second appeal fails and it is dismissed. No costs. No leave.