Barkha Ltd. has four directors on its Board. A Board meeting was convened which was attended by only two directors, where Rekha was appointed as an additional director. Rekha is related to both the directors. Referring t

Section 188 of Companies Act, 2013 provides that except with the consent of the Board of Directors given by way of resolution at a meeting of the Board and subject to such conditions as may be prescribed, no company shall enter into any contract or arrangement with a related party with respect to appointment of such related party or any office or place of profit in the company. Under the given case both the present directors were related to Ms. Rekha who was appointed as additional director at the meeting. Wherein the transaction is at Arm's length basis the appointment stands valid.