Sec 297

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 February 2013 Some says SEc 297 of the Act is not applicable if both the parties to the contract are Public Co. in which section of the act provides this exemption or any case law is in support of this stand

also tell me a contract entered between a public ltd co and (a pvt co. which is a subsidiary of public ltd co.) deemed public co. can claim the same exemption ?

Ajay Mishra

Ajay Mishra (Expert)
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08 February 2013 Hi

Section 297 does not apply to:

1. Giving or taking loans.
2.Contract in respect of immovable property (as it is not 'good' ).{Letter No. 9/4190-CL-X dated 27.03.1990}.
3.Contract between two public Companies.
4.Contract of employment of director or managing or whole time director.[ Circuler No.8/11/75-CL-V dated 27.03.1975]
5.Contract for employment of relative of director.
6.Contract entered into by the company with the dealer on principle to principle basis. [Circuler No. FM 8/297/56-PR dated 02-08-1956]
7. Professional services of the nature given by firms of solicitors and advocates, etc.[circuler No. 8/11/75-CL-V dated 05.06.1975]
8.hiring of office premises on rent as the transaction is in immovable property. [Department Clarification dated 10-09-1990]

Ajay Mishra

Ajay Mishra (Expert)
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08 February 2013 In your case, you can not claim exemption, because it is private company by its charter (MOA/AOA).

It will be treated as private limited company.

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Querist : Anonymous

Querist : Anonymous (Querist)

08 February 2013 thank you sir

Ajay Mishra

Ajay Mishra (Expert)
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08 February 2013 My Pleasure................

CA Kishore Tallam

CA Kishore Tallam (Expert)
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08 February 2013 Sec 297 itself specify that it is not applicable to transaction between two public companies.
Also, in case of transaction between public company and private company, this section will not be applicable to public company but it will be applicable to private company.