Mr X was the registered shareholder of 601 shares in a public limited company of which Mr. Y, Mr. P& Mr. Z were the directors. The objects of the memorandum of association of the company neither included dealing in shares, nor the purchase of company's own shares yet the directors of the company did deal in shares. The investment made profit and the same was extended to the company. Subsequently, the investment incurred losses on behalf of company, and directors purchased 1422 shares of the company. The company had to bear all the loss incurred because of the share transactions done by the directors on its behalf. Majority shareholders passed a resolution and accepted all share trading transactions done by the directors. Mr X, one of the registered shareholders of the company called the deal in shares by the directors as not binding on the company and demanded the loss to be borne by directors.

Mr X contended that the directors must be accountable for such unauthorized dealings and should pay all losses thereby incurred to the company. On the other hand, the directors denied the allegations and personal liability to pay for the losses of the company. It was further argued by the directors that the shareholders passed a resolution in favour of those transaction and therefore, the liability to bear the expenses was passed to the company.

Could the directors be held responsible personally for the loss incurred by the company on the ground of ultra vires act? Reason