KNOW YOUR LAW #7 - STEPPING BEYOND THE YARDSTICK – DOCTRINE OF ULTRA VIRES
PROVISION COVERED Section 4 CONCEPT COVERED Can a Company exceed its legal power bestowed by the MOA KNOW YOUR MEANING : The Latin phrase Ultra vires connotes certain act(s) undertaken exceeding the legal power bestowed under a statute because of which such acts are recognised as unauthorised. Merriam Webster’s dictionary defines Ultra Vires as “beyond the scope or in excess of legal power or authority ”. The Supreme Court of India in “ State of U.P. & Ors. v. Hindustan Aluminium Corpn. Ltd. (1979) ” expounded that “That no doubt is another aspect of the doctrine of ultra vires , for an offending Act can be condemned simply for the reason that it is unauthorised. ” THE DOCTRINE : Every company domiciled in India derive their power to operate from the Companies Act, 2013 read with rules made thereunder along with other legislations. The law does not constrict the companies on the nature of business act...