22 December 2010
Wheather in all the cases of contravention of sec295 it is implied that the director shall vacate his office U/s 283 ( OR) only in the following cases:
1)where the director himself or by any other person for his benefit or on his account accepts a loan/guarantee/ security in contravention of sec 295 2)where the firm in which he is a partner accepts a loan/guarantee/ security in contravention of sec 295 3)where a private co. in which he is a director accepts a loan/guarantee/ security in contravention of sec 295.
please give me the explanation also. thanks in advance..
The office of the Director shall become vacant under section 283 of the Companies Act, 1956 only in the cases of contravention of section 295 as specified in the above mentioned points and not in all the cases of contravention of section 295 of the Companies Act, 1956.
However, the provisions of section 295 of the Companies Act, 1956 are not applicable to an Independent Private Company.
Hence, when a Private Company gives any loan to
1.its Director or Director of Holding Company or relative of any such director,
2. any firm in which any such Director is a partner,
3. any private Company in which any such Directors is a Director.
Hence, in the above case of a Private Company there is no violation of provisions of section 295, the office of the Director shall not become vacant.
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