Ultra vires shareholder challenge and special resolution validity turned on statutory voting compliance and recorded figures.

A shareholder may sue in his own name to challenge an act alleged to be ultra vires, because such an act is beyond the company's powers and cannot be ratified by the majority; prior consultation with the company is unnecessary where that course would be futile. A special resolution must satisfy the statutory majority requirement, and a Chairman's declaration does not validate a resolution where the recorded vote itself shows non-compliance. On the stated figures, the three-fourths majority was not achieved, so the alteration of the articles was not binding.

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Issues: (i) Whether the suit by the dissenting shareholder was maintainable without first obtaining the company's concurrence. (ii) Whether the alteration of the articles was validly carried as a special resolution under the statutory voting requirements.

Issue (i): Whether the suit by the dissenting shareholder was maintainable without first obtaining the company's concurrence.

Analysis: A shareholder may sue in his own name where the impugned act is alleged to be ultra vires or beyond the company's powers, because such an act cannot be ratified by the majority. The rule requiring the company to decide whether litigation should be undertaken applies only where the complained-of act is ratifiable. On the facts, the company had already taken the stand that the resolution was valid, so a prior consultation with the company would have been futile.

Conclusion: The suit was maintainable.

Issue (ii): Whether the alteration of the articles was validly carried as a special resolution under the statutory voting requirements.

Analysis: Under the governing provisions, a special resolution requires the prescribed majority, and the Chairman's declaration is conclusive only in the manner contemplated by the statute. Where the declaration itself records the voting figures and those figures show that the necessary majority was not obtained, the declaration cannot validate a resolution that was not passed in accordance with law. The recorded vote of 218 for and 78 against did not satisfy the statutory requirement of a three-fourths majority.

Conclusion: The resolution was not validly passed and was not binding on the company.

Final Conclusion: The challenge to the resolution succeeded, and the decree in favour of the respondent was left undisturbed.

Ratio Decidendi: A shareholder may directly challenge a corporate act alleged to be ultra vires, and a resolution is not saved by the Chairman's declaration where the recorded voting figures themselves show non-compliance with the statutory majority required for a valid special resolution.

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