section 297

[(2) Nothing contained in clause (a) of sub-section (1) shall affect-

(a) the purchase of goods and materials from the company, or the sale of goods and materials to the company, by any director, relative, firm, partner or private company as aforesaid for cash at prevailing market prices; or

(b) any contract or contracts between the company on one side and any such director, relative, firm, partner or private company on the other for sale, purchase or -supply of any goods, materials and services in which either the company or the director, relative, firm, partner or private company, as the case may be, regularly trades or does business.

Provided that such contract or contracts do not relate to goods and materials the value of which, or services the cost of which, exceeds five thousand rupees in the aggregate in any year comprised in the period of the contract or contracts; or
 
i want to know that weather in case of regular trade goods can be of any worth or dere is limit of 5000 
as it shows from this section that goods worth rs 5000 can be traded once and goods of higher value have to be traded on regular basis
Replies (3)

Dear Friend,

Section 297 clearly states

Provided that such contract or contracts do not relate to goods and materials the value of which, or services the cost of which, exceeds five thousand rupees in the aggregate in any year comprised in the period of the contract or contracts; or

It means that the cost of the goods purchased or Sold during the financial year should not  exceed Rs. 5000/- unless prior approval by passing a resolution in the board meeting taken.

Upto my understanding;

 

Here, it means, that company regularly sale, purchase or supply of any goods, materials or services (of any amount) but the transacton entered with the director/relative/firm/partner/private company {i.e. Transaction in which director(s) is/are interested} is not in excess of Rs. 5,000/- in aggregate of one year.

 

Regards, 

The provision of section 297 is not apply to contracts  made for cash at prevailing market price or a company main business of goods or supply of services.

 

Regards

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