Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Violation of Section 295

Others 1135 views 5 replies

Swagatam Khandelwal

Company Secretary

107 Points Posted on 06 January 2011

A Public Limited Company has given loan u/s 295 without taking prior approval of CG. What are the remedies available to the Company??Pls reply fast

Replies (5)

nidhigoel89

Company Secretary

596 Points Posted on 06 January 2011

Hello!

In that case that director is liable for the vacation of the office of director u/s 283(1) (h). and penalty as mentioned u/s 295 will also be imposed. However its a compoundable offence u/s 621A. So u can file a application for compounding.

Any further suggestions....

Regards

Nidhi

Jayashree S Iyer

Company Secretary

3224 Points Posted on 07 January 2011

Go in for compounding.

Mayuri Lal

officer CS

748 Points Posted on 08 April 2011

hi,

I have posted the same query. If we go for compounding of an offence still the director will have to vacate the Office under section 283 ???

CA Sandeep Kumar

Audit Assistant

804 Points Posted on 08 April 2011

YES, compounding of sffence is separately dealt with. The moment there is contravention of section 295, director is hit by section 283. To avoid imprisonment compounding is allowed, that does not mean, director can escape u/s 283 also.

Mayuri Lal

officer CS

748 Points Posted on 08 April 2011

I think it should be a violation which is in existance if the loans have been repaid in full he need not vacate the office.

Also pl tell me that as per your view even if he vacates the office , immediately thereafter he can be appointed . Then there is no point in this provision to vacate the office even if the loans have been repaid.