I ve read some discussions on the above topic which concluded that section 185 overrides section 186 of the Act,2013, since Section 185 is a saving provision when Section 186 starts with a phrase " without prejudice to ................ ".
As far as my knowledge goes, this phrase applies only to sub section (1) of Section 186 which speaks about investment through investment companies.
Can we say that Section 186 prevails over Section 185?
One of my client companies is a partner in a firm and one of its directors is also a partner. Before the Act,2013, this Company has been providing security to a Bank which has granted loan to the firm.
12 July 2014
Section 185 of the Companies Act, 2013 starts with the word “Save as otherwise provided in this Act” that means any other section or provisions of the Act relating to loans to directors and other related parties will override the Section 185. However, Section 185 is specific and 186 is general section. The specif will prevail over general provisions.
15 July 2014
Thank You. Let me share my perspective with you. Please share your views too.
Section 185 prohibits generally loan etc to certain categories when Section 186 provides the limits up to which and the approval required to give any loan etc to that category which are not exempted under Section 185 of the Act.
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