Making any loan to its directors without the previous approval

Making any loan to its directors without the previous approval of the Central Government in that behalf. However, the Court said that the essential requirement of a loan is the advance of money (or some article) upon the understanding that it shall be returned; it mayor may not carry interest. The debt here arose not out of an advance but out of the sale of the flat by the company to the managing director. The company gave time to the managing director to pay a part of the purchase price. The managing director was thus given official accommodation by the company in the matter of payment of the debt. Such official accommodation was not and did not amount to a 10arl When refers to an indirect loan to a director, what it means is that the com 1i.hall not give
a loan to a director through the agency of one or more intermediarie&. The word
‘indirectly’in the Section cannot be read as converting what is not a loan into a loan.
Thus, there was no contravention of Section 295.
With reference to the provisions of the Companies Act, 1956 examine the validity of the following:
0, who is a director already in 19 public limited companies, accepts the directorships
of the following companies:
(i) BC Private Limited, which is the holding company of a public limited company.
(ii) RM Company which is an unlimited company.
(iii) MJ & Company Ltd., as an alternate director.
Or
Mr. Influential is already a director of 19 companies. He is being appointed as a director of another company named MIs. Expensive Remedies Ltd. Advise Mr. Influential in regard to the following: