In the light of judicial pronouncements, discuss the following: A restriction which is not specified in the Articles of Association is not binding either on the company or the shareholders.

While shareholders' agreements are enforceable in England regardless of whether they have been incorporated in the articles of association of the company, in India courts have either refused to recognize clauses in shareholders agreements or, even when consistent with company legislation, enforced such clauses only if they have been incorporated in the articles of association of the company. In a series VB Rangaraj vs. VB Gopalakrishna (AIR 1992 SC 453) the courts have held that in case of any conflicts between the articles and shareholders agreement, the former will always prevail.