Directors' misuse of borrowing and investment powers is internal management, not ultra vires, and civil suit relief is unavailable.

A company's borrowing and investment transactions, where authorized by its memorandum and articles, are not ultra vires merely because directors may have misused that power. The alleged misuse was treated as an issue of excess authority or misapplication within the company, remediable under company law rather than as a challenge to the company's external powers. The dispute also concerned internal management, because it went to the wisdom and propriety of directors' decisions over company funds. Civil courts would not grant declaratory or injunctive relief on such an internal corporate matter, leaving any remedy to the Companies Act framework.

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Issues: (i) Whether the company's borrowing of monies and investment of funds in shares of other companies was ultra vires the company and could be challenged by the shareholder in a civil suit. (ii) Whether the dispute concerned matters of internal or indoor management for which the civil court would not grant declaratory or injunctive relief.

Issue (i): Whether the company's borrowing of monies and investment of funds in shares of other companies was ultra vires the company and could be challenged by the shareholder in a civil suit.

Analysis: The acts complained of were treated as isolated transactions of borrowing and investment rather than a course of business in purchase and sale of shares. On that footing, any excess or misuse by the directors was at most beyond their authority under the articles, not beyond the company's powers under the memorandum. The company's memorandum and articles were read as permitting borrowing and investment, and the grievance was therefore one of misapplication of power, remediable within the company law framework.

Conclusion: The acts were not held ultra vires the company, and the shareholder could not succeed on that footing.

Issue (ii): Whether the dispute concerned matters of internal or indoor management for which the civil court would not grant declaratory or injunctive relief.

Analysis: The challenge was directed to the directors' management of company funds and the wisdom or propriety of borrowing and investing decisions. Such questions were treated as matters of internal management, not as a justiciable civil controversy on the company's external powers. The appropriate redress, if any, lay under the Companies Act rather than by a regular civil suit for declaration and injunction.

Conclusion: The matter was held to be one of internal management, outside the scope of relief in the civil suit.

Final Conclusion: The appeals failed because the complaint disclosed, at most, an abuse of managerial powers within the company, not an ultra vires act of the company itself, and the civil court was not the proper forum for the relief sought.

Ratio Decidendi: Where a company has power to borrow and invest, an alleged misuse of that power by directors is ordinarily a matter of internal management or excess of authority under the articles, not an ultra vires act of the company, and is not to be corrected by a civil suit for declaration and injunction.

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