Krunal Shah (Company Secretary) (28 Points)
18 December 2012A Public unlisted Company have more than Rs. 1 cr. paid up capital, this unlimited company made contract with pvt ltd company, and pvt ltd's company's directore is the relative of unlisted public company's director.
Whether Section 297 applicable or not ????
suggess me as soos as possible
Giridhar S Karandikar
(Team Lead)
(7548 Points)
Replied 19 December 2012
The main condition for applicability of section 297 is that the contract shud be entered into between the company & the specified person. In the present case the company is entering into an contract with the private copany in which the director of the public company shud also be the director of the pvt co. But there is no such condition whihc is being satisfied. The director of the pvt co is teh relative of teh director of teh public co would not satisfy the criteira becaseu teh public co is entering into a contrct with the pvt co & not the director's relative. However if teh public co would have entered into a contract with teh relative of the director individually then the provision of section 297 would have got attracted. So int his case section 297 would be N/A.
however the director of the public co would be considered as an interested director & would be requried to dsiclose his interset u/s 299/300. He would not be entitled to participate into the Board Meetings and will also not have any right to vote.
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