Explain the exceptions, if any, to the Majority Rule in Foss v. Harbottle case law.

The majority rule in Foss v Harbottle 67 E.R. 189; (1843) 2 Hare 461 states that no action can be brought by a minority member against the directors in respect of a wrong alleged to be committed to the company. However, the rule in Foss v Harbottle is not absolute but is subject to certain exceptions. Apart from the protection by the Companies Act, 2013, the minority shareholders are also protected by common law i.e., unwritten customs and practices having the force of law. In a noted case ICICI v Parasurampuria Synthetics limited, the Delhi High Court has ruled that an automatic application of the rule of majority as enunciated in Foss v Harbottle to the Indian corporate realities case would not be proper. The Court has said that though financial institutions hold only a small percentage of the shares in a company, they provide the bulk of finance as working capital for the continuous day-to-day operations of the company and therefore, to exclude them or to render them voiceless on application of the principles of Foss v Harbottle Rule would be unjust and unfair. The Rule also does not apply in case of ultra-virus acts . Where the directors representing the majority of shareholders perform an illegal act or ultra-virus act for the company, an individual shareholder has the right to bring an action / law suit to restrain the company by an order or an injunction of the Court from the carrying on any ultra-virus act by the company as decided in Bharat Insurance Limited v Kanhya Lal (A.IR 1935) case. When an act done by the majority amounts to a fraud on the minority shareholders , an action to restrain the company or the wrong doers can be brought by even an individual shareholder. The Court will see whether the resolution passed by the majority is bonafide for the benefit of the company as a whole (Allen v Gold Reefs of West Africa case law). If the wrong doers are in control of the company, the minority shareholders can take legal action for fraud by the majority. The Court may entertain the plea because, if the minority shareholders are denied the right of legal action, their grievance would never reach the Court as the wrongdoers themselves being in control of the affairs of the company, they will never allow the company to sue the majority shareholders as decided in a case law (Edwards v Haliwell (1970) 2 All E.R)