1. The company, Jon Beauforte Ltd., a public listed company was authorized by its memorandum of association to carry on business of ready-made garments, gowns, robes, dress and mantle makers, tailors and other activities of allied nature. But later the directors of the company decided to carry on the business of manufacturing veneered panels. For this purpose, the company founded a factory. The resolution approving the allocation of funds for factory construction was passed in the Board of Directors meeting.A firm of builders who constructed the factory had brought an action claiming Rs 10,00,000 and another firm that supplied veneer to the company had a claim of Rs 10,00,00. The company committed a default of payment to the contractors alleging that contract was ultra vires of the company. The matter went into dispute, following which share price of the company fell by 50% within a week.

• Will doctrine of ultra vires be applicable in this case? Explain.
• Can the contractors press claims under doctrine of indoor management against the company? Explain.