09 May 2011
whether Co. has to take prior approval of Central government if its paid up Capital is More than 1 crore, and contract is entered into for cash at prevailing Market price ?
as Subsection (2) states that nothing in clause (a)of sub section (1) shall affect if the contract for purchase or sale of goods is for cash at prevailing market price.
and proviso to subsection (1) of section 297 states that prior approval is required of central government.
The provisions of Section 297 will not be applicable in case of contract entered into between the parties specified therein, is for purchase /sale of goods/materials for cash at prevailing market prices. Hence, no approval of the Central Government is required.
Pls. note that this exemption is not application in case of a contract for supply of services for cash at prevailing market prices.
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