Section 93 : Transaction with company in which director is involved

(1) Except as otherwise provided in this section, a public company shall not, without the approval of the general meeting, enter into any meaningful transaction with any of its directors or close relatives of the directors or the basic shareholders or any other firm, company or other organisation in which the director, close relatives of the directors or the basic shareholders own the basic shares or without the approval of the general meeting of its main company, the subsidiary company shall not enter into any transaction with the directors or close relatives of the main company or the basic shareholders.

Explanation: For the purposes of this section, “meaningful transaction” means a transaction relating to the purchase, sale, transaction, lease of any goods or services of a value exceeding one lakh rupees or five per cent of the total assets of the company, whichever is less, and includes an annual turnover of one lakh twenty thousand rupees or more.

(2) In the event of any transaction contrary to sub-section (1), any amount or profit derived directly or indirectly from such transaction shall be refunded to the company and if any loss is caused to the company by such transaction, the person who has benefited from such transaction shall be liable to pay compensation.

(3) Notwithstanding anything contained elsewhere in this section, the provisions of sub-section (1) shall not apply in respect of property acquired in accordance with the following: –

(a) When the principal company acquires such property from its wholly owned subsidiary,

(b) When a wholly owned subsidiary of the main company acquires such property from another wholly owned subsidiary of the same main company,

(c) Trading at the prevailing market price in the course of the regular business of the company.