Board of directors of Joy Ltd., by a resolution passed at its meeting, decide to provide a loan of ₹50 crore to Happy Ltd. The paid-up share capital of Joy Ltd. on the date of resolution was ₹100 crore and the aggregate

In accordance with the section 186 of the Companies Act, 2013 no company shall, directly or indirectly: Give any loan to any person or other body corporate; Give any guarantee, or provide security, in connection with a loan to any other person body corporate or person; and Acquire, by way of subscription, purchase or otherwise the securities of any other body corporate; Exceeding 60% of its paid-up share capital, free reserves and securities premium account or 100% of its free reserves and securities premium account, whichever is more unless the same is previously authorised by a special resolution passed in the company's general meeting. No loan or investment shall be made or guarantee or security given by the company unless the resolution sanctioning it is passed at a meeting of the Board with the consent of all directors present at the meeting. Accordingly, in the given case, the company can grant a loan of ₹50 crore, since the company can grant a loan up to ₹84 crore (i.e. 60% of ₹100 crore + ₹40 crore i.e. = ₹84 or ₹40 crore whichever is more) without the approval of the general meeting by a special resolution and the Board meeting with the consent of all the directors present. Only Board's resolution to provide a loan of ₹50 crore to Happy limited without the approval of general meeting by a special resolution is valid.