A Company named ‘Y’ has a wholly owned subsidiary private limited company in addition to other Companies in the group.
‘X’ is a managing partner of a Law firm and his firm provides legal services to the Company ‘Y’ and its other group Companies for about 2 years now and would continue to do so in the years to come. For this, Company ‘Y’ and its other group Companies makes payment to the Law Firm by cheque.
Now, this is regarding the appointment of ‘X’ as an independent non-executive director in the Board of the Company ‘Y’.
Now, does this attract sec- 297 of the Companies Act, 1956? Do we have to take approval of Central Govt.? Please give a detailed picture.
Request all of you to provide their valuable opinion?