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URGENT_SEC 295 & 283 DOUBTT

Mayuri Lal (officer CS) (748 Points)

07 April 2011  

Dear Members,

 

Have a doubt regarding the vacation of office by Directors -Section 283 who falls under the contravention of section 295

There is a public Company who has defaulted under section 295. as in the Company has given loan to the person specified in the sction 295 without obtaining the central governments approval.

Now there is a default so the borrowed money was repaid in full. and in section 295 it says that where any such loan is reapaid in full no punishment by way of imprisonment  shall be imposed under this section .So thsi is taking bout the Director to whom the loan is given rite????

 

ANd now section 283 says that director will vacate the office when the director accepts a loan in contravention of sec 295.

 

If the LOAN is REPAID, still the Director will have to vacate the office .

Please tell me as to whether section 283 will eb hit even if the loan is repaid in fullllll...

 

Regards,

Mayuri Lal


 2 Replies

Jaideep (Service) (1363 Points)
Replied 08 April 2011

Hi Mayuri,

 

In my opinion, pursuant to section 283, director will vacate the office when he accepts a loan in contravention of section 295. When he has accepted loan he is under default, proviso for waiving punishment is only for imprisonment, for others it will have effect of default.

 

What I mean is default is default; section 295 has relaxed only for the imprisonment which would otherwise come under criminal offence, for other offences he is still under default for section 295 even though he repaid all loan amounts.

 

Thanks & Regards

Jaideep Pandya

1 Like

Sudhir Garg (Service) (236 Points)
Replied 08 April 2011

Agree with Jai


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