Section 297

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Querist : Anonymous

Querist : Anonymous (Querist)

12 June 2012 Q. if there are 2 cos. & directors & shareholders of both cos. are same, Co. 1 gives advance to Co. 2 for contract , but no performance of contract takes place & Co. 2 refunds advance to Co. 1.
in any case will section 297 of Companies Act, 1956 be attracted?

Ajay Mishra

Ajay Mishra (Expert)
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12 June 2012 Hi

Section 297 will apply in all cases except the following:

1. Giving or taking loans.
2.Contract in respect of immovable property (as it is not 'good' ).{Letter No. 9/4190-CL-X dated 27.03.1990}.
3.Contract between two public Companies.
4.Contract of employment of director or managing or whole time director.[ Circuler No.8/11/75-CL-V dated 27.03.1975]
5.Contract for employment of relative of director.
6.Contract entered into by the company with the dealer on principle to principle basis. [Circuler No. FM 8/297/56-PR dated 02-08-1956]
7. Professional services of the nature given by firms of solicitors and advocates, etc.[circuler No. 8/11/75-CL-V dated 05.06.1975]
8.hiring of office premises on rent as the transaction is in immovable property. [Department Clarification dated 10-09-1990]

Regards

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