Interested directors - Contracts in which directors are interested - Companies Law - F.M. 8/297/56‑PR,

Circular : No. F.M. 8/297/56 ‑ PR, dated 2 ‑ 8 ‑ 1956. Subject:- Interested directors - Contracts in which directors are interested The provisions of section 297 would not become applicable to the contract entered into by the company with a dealer on a principal to principal basis, unless the contract is in respect of goods which the dealer sells or supplies on an agency basis vis‑a-vis the private company or firm manufacturing the goods supplied. The limit of Rs. 5,000 in sub‑section (2) of section 297 applies to the aggregate of transactions over a calendar year as between two parties contracting, one of which is the company, making the purchase or effecting a supply, and the other a director of the company or his relative, a firm, in which such a director or relative is a partner, any other partner in such a firm, or a private company of which the director is a member or director, as the case may be, in respect of contract or contracts for purchase or supply between them.