Section 297 of companies act

This query is : Resolved

Sweta Agarwal (Querist)
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13 July 2011 A public company enters into contract to provide services with a private company and payment has been made by public company by credit card.both the companies have common directors, so in such case section 297 is applicable. As public company has more than one crore paid up share capital so Central Government approval also require together with Board resolution, But public company has not taken any approval from the central government, so compounding of offence u/s 621A can be applied.
Is there any way to proof that company has not done non compliance and no penalty is require to pay?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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13 July 2011 Offence sustains. Fine u/s 621A ,as u know, is up to Rs.5,000/- and further fine up to Rs.500/- for each day of default.

Sweta Agarwal

Sweta Agarwal (Querist)
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13 July 2011 as payment is made by credit card and credit card can be issued in the name of individual only so can it be shown that transaction is between individual to private company and not between company to company?

Further transaction is done at market price only, so this can also be the criteria?

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Sweta Agarwal

Sweta Agarwal (Querist)
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14 July 2011 as payment is made by credit card and credit card can be issued in the name of individual only so can it be shown that transaction is between individual to private company and not between company to company?

Further transaction is done at market price only, so this can also be the criteria?

Sweta Agarwal

Sweta Agarwal (Querist)
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14 July 2011 My another question is in case of services if public company is a service recipient then whether 297 is applicable on public company