297 & 299

As per Ramaiya view:

Dear Mr. Satheesh

Interested directors will not be taken into consideration for the “quorum” of the board meeting as per provisions of section 287. However, where at any time the number of interested director the number of directors exceeds or equal to 2/3rds of total strength of the number of remaining directors, i.e. the number of un-interested directors shall be quorum. In a contingency where all directors are interested (like your case) in a contract, the department expressed the following view:

The remedy in such case seems to increase the board strength by appointing disinterested directors or to co-opt or appoint additional directors if so authorised by the articles who are not interested in the said contract. If this is not found practicable, it would be desirable to place the proposed contract before the general meeting for consent.(letter No. 8/16/(1) 61-PR, dated 09.05.1961).

Thus, based on said department views, your procedure is valid.  

Agree with the learned member and your point of view.

One thing to add as now you are going for the shareholders' approval so you may hold the board meeting and pass the necessary board resolution subject to the approval of shareholders. Also approval notice of GM. Mention everything in the commentry of board minutes like interest of directors and necessity to refer the case to the shareholders. This is just to make your board minutes more realistic and up to the standard.

Best Regards