Case List: Articles of Association vs. Shareholders Agreements – Which one prevails?

ByVivek Kumar Verma
Section 36 of the Companies Act, 1956 makes the Memorandum and Articles of Company, when registered, binding not only on the company but also the members inter-se to the same extent as if they had been signed by the company and by each member and covenanted to by the company and each shareholder to observe all the provisions of the Memorandum and of the Articles. The Articles of Association constitute a contract not merely between the shareholders and the company but between the individual shareholders also. The Articles are a source of powers of the Directors who can as a result exercise only those powers conferred by the Articles in accordance therewith. Any action referable to the Articles and contrary thereto would be ultra vires.

Case List

  • Smt. Claude-Lila Parulekar vs. Sakal Papers Pvt. Ltd. and Ors., 2005, Supreme Court; (2005)11SCC73
  • L. Chandramurthy vs. Pearl Metal Products Private Limited and Ors., 2008, CLB; [2009]149CompCas291(CLB)
  • AIDQUA Holdings (Mauritius) Inc. vs. Tamil Nadu Water Investment Company Ltd.,2014, Madras High Court; (2014)4MLJ429

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