Question

A class action suit may be filed by prescribed number of members of a company before the Tribunal on behalf of the members or depositors for seeking any of the following orders except:

• A. to restrain the company from committing an act which is ultra vires the articles or memorandum of the company
• B. to restrain the company from committing breach of any provision of the company’s memorandum or articles
• C. to declare a resolution following the memorandum or articles of the company as void if the resolution was passed by suppression of material facts or obtained by mis-statement to the members or depositors
• D. to restrain the company and its directors from acting on such resolution

Answer 1

The Correct Option is C

A class action suit in a company context allows members or depositors to seek specific orders before the Tribunal. However, one of the options listed is not typically within the scope of a class action suit:
Option a) is correct because a class action suit can be filed to restrain the company from committing an act that is ultra vires (beyond the powers) of the company’s articles or memorandum.
Option b) is also correct because the Tribunal can be asked to restrain the company from breaching any provision of its memorandum or articles.
Option d) is correct as a class action can seek to restrain the company and its directors from acting on a resolution that violates the articles or memorandum.
However, option c) is not correct. A class action suit cannot be used to declare a resolution as void simply based on the suppression of material facts or misstatement, as this issue typically falls under the realm of corporate governance and requires a different legal process. The Tribunal cannot directly declare a resolution void in such cases through a class action suit.