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· Indirect interest of directors as provided under section 299 · Hiring of office premises on rent (as the transaction is an immovable property) · A government company in respect of contracts entered into by it with another government company · Any contract for the sale, purchase or supply of goods, materials or services in which: a). Section 297 mandates to obtain the prior consent of the Board of Directors for contracts (as mentioned above) in which the directors are interested.

the company or the other party regularly trade or does business and, b). Section 297 deals with the transactions between the company and § A director of the company § His relative § A firm in which the director or his relative is a partner § A private company of which the director is a member or director § And a partner of a firm in which the director or his relative is a partner The contract shall be entered only with the consent of Bo D accorded by a resolution passed in the board meeting.

Although the prior approval of Bo D is required u/s 297, a relaxation under sub section (3) of section 297 has been provided.

If the circumstances are of urgent necessity the prior approval of the Board is not required but the consent should be obtained within three months by a resolution passed in the board meeting.

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But where a company requires the previous approval of central government this relaxation shall not apply. or more are required to obtain prior approval from the Central Government (power delegated to the Regional Director) for entering into contracts covered under section 297. 24 of the companies’ general rules and forms along with a copy of board resolution and copy of agreement to be entered into should be filed. 394AA would be enough and no separate approval under section 297 would be required.

However if facts and circumstances of a case require the approval u/s 269 or 314(IB) or sec. Failure to obtain the Board’s consent will make a contract voidable at the option of Bo D.

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