Question

what is doctrine of indoor management (in detail)​

Answer 1

Answer:

The doctrine of indoor management, also known as Turquand rule is a 150-year old concept, which protects the outsiders against the actions done by the company. Any person who enters into a contract with the company shall ensure that the transaction is authorised by the articles and memorandum of the company.

Explanation:

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Answer 2

Explanation:

The doctrine of indoor management, also known as Turquand rule is a 150-year old concept, which protects the outsiders against the actions done by the company. Any person who enters into a contract with the company shall ensure that the transaction is authorised by the articles and memorandum of the company.

There is no requirement to look into the internal irregularities, and even if there are any irregularities, the company shall be held liable since the person has acted on the grounds of good faith. To absorb the concept of this doctrine, it is important to understand the concept of the doctrine of constructive notice.

Doctrine of Constructive Notice

Origin of Doctrine of Indoor Management

Exceptions to the Doctrine of Indoor Management

1. Doctrine of Constructive Notice

Section 399 of the Companies Act, 2013 states that any person may, after payment of the prescribed fees:

a.– Inspect by electronic means any documents kept with the – Require a copy of any document including certificate of incorporation.

In line with this provision, the Memorandum of Association and the Articles of Association are public documents once filed with the registrar. Any person may inspect the same after payment of the fees prescribed.

The doctrine presumes that every person has knowledge of the contents of the Memorandum of Association, Articles of Association and every other document such as special resolutions. The special resolutions are required to be registered with the Registrar under the Companies Act, 2013. This principle has been upheld in the landmark case of Oakbank Oil Co. V. Crum (1882) 8 A.C.65.Thus, if any person enters into a contract, which is inconsistent with the company’s Memorandum and Article, he shall not acquire any rights against the company and shall bear the consequences himself.

2. Origin of Doctrine of Indoor Management

The doctrine originated from the landmark case Royal British Bank V Turquand (1856) 6 E&B