Query section 314(1) of the companies act, 1956.

Hi:

XYZ, a private limited company has two directors, A and B (B is wife of A).

XYZ wants to avail consultancy services from ABC, a sole proprietory firm, owned by A and wants to pay a monthly remuneration of Rs.5 lacs to ABC as consultancy fees.

Does this transaction between 1) a private limited co. and 2) a sole proprietory concern owned by the Director of the Company, attracts the provisions of section 314(1) of the Companies Act, 1956? Pls advise.

Thanks,