Doctrine of Ultra Vires

CASE LIST

Ashbury Railway Carriage and Iron Co. vs. Riche, [1875] L. R. 7 HL 653

When an act is performed or a transaction is carried out, which, though legal in itself, is not authorised by the object clause, in the memorandum of association, such an act is null and void.

Attorney General vs. Great Eastern Railway Co., [1880] 5 AC 473 (HL)

“Whatever may fairly be regarded as incidental or consequential upon those things specified in the memorandum of association as object ought not to be held ultra vires unless expressly prohibited.”

Rolled Steel Products (Holdings) Ltd v British Steel Corporation [1986] Ch 246 

A company has power to do only those things which are within, or reasonably incidental to, its stated objects. If an act is capable of being in pursuance of, or incidental to, the stated objects, it could not be ultra vires and void because of the purpose or state of mind of the directors who authorised it.

Radhabari Tea Company Private Limited vs. Mridul Kumar Bhattacharjee and Other, 2009 Indlaw GUW 44  

The doctrine of ultra vires provides that an action, taken by the board of directors of a company or the company itself beyond the powers conferred on the company and/or its directors by the memorandum of association of the company, is ultra vires.

White and another v South Derbyshire District Council, [2013] P.T.S.R. 536 90 (UK Case)

An ultra vires act is not necessarily void for all purposes and the law would strive to protect innocent third parties who had relied upon the apparent validity of such an act.

Note: 

Under the new Companies Act, 2013 this doctrine of ultra vires gives a ground to the members and depositor(s) of the company to file an application before the Tribunal on behalf of the members or depositors for restraining the company from committing an act which is ultra vires the articles or memorandum of the company vide Section 245(1)(a) of the new Companies Act, 2013.