Sec 297 & 314 combined applicablility

This query is : Resolved

viveka (Querist)
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23 July 2012 A relative of director is appointed by the Board to hold place of profit at a monthly remuneration not exceeding Rs.8000/-. As per Sec 314 this does not require approval of EGM or Central Government. The company is public limited and is having capital Rs.10 crore.

The query is: whether we need to obtain approval of Central Government u/s 297 for availing the services of such relative of director.
As per circular 13/75 of 1975 the professional services of advocates/ solicitors who are relatives of directors have been exempted from the purview of sec 297.

Could somebody pls clarify whether Central Govt approval u/s 297 is required if:
- the appointee is not professionally qualified

- the appointee is professionally qualified

Ajay Mishra

Ajay Mishra (Expert)
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23 July 2012 Hi

It has been clarified by the Central Government that where facts and circumstances of a case require approval under section 269, 314(1B), 294AA and also under section 297, approval under section 269, section 314(1B) or section 294AA would be enough and n separate approval under section 297 would be required.

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