doctrine of indoor management is an exception to the rule of constructive

The doctrine of indoor management is an exception to the rule of constructive notice. Memorandum of Association and Articles of Association are supposed to be filed with the Registrar of Companies at the time of incorporation. Registrar's office being public office, any person interested in knowing the contents of these documents can ask fOI the same and inform himself. Therefore, a person dealing with a company is deemed to have knowledge of the Memorandum and the Articles of Association of the company. So, if he enters into a transaction with the company which.is ultra virus the Memorandum or Articles, he cannot treat the transaction as binding on the company. On the other hand, if the transaction appears to be a
proper one, when compared with the Memorandum and Articles, it would be grossly unfair if the company could escape liability under it by showing that there was some irregularity in the conduct of the company's affairs leading upto the transaction, when the other party did not know of the irregularity and had no means of discovering it.
This rule has been described by Lord Hatherley as the 'Doctrine of Indoor Management'. According to this doctrine, while persons dealing with the company are bound to read the registered document, and to see that the proposed dealing is not inconsistent therewith; they are not bound to do more, they need not inquire into the regularity of the internal proceeding and may assume that all is being done regulary.
Palmer's Compmy Law. The doctrine of constructive notice prote(;LS the company against outsiders, the Doctrine of Indoor Management seeks to protect outsiders against the company.