Ajit is a Director of PQR Ltd. The Board of Directors of the company is considering a proposal for the purchase of its office premises for which is owned by Ajit by issuing fully paid equity shares as consideration. What

The provisions for restrictions on non-cash transactions involving directors are contained in Section 192 of the Companies Act, 2013, which are discussed as under: (1) No company shall enter into an arrangement by which: a director of the company or its holding, subsidiary or associate company or a person connected with him acquires or is to acquire assets for consideration other than cash, from the company; or the company acquires or is to acquire assets for consideration other than cash, from such director or person so connected, unless prior approval for such arrangement is accorded by a resolution of the company in general meeting and if the director or connected person is a director of its holding company, approval shall also be required to be obtained by passing a resolution in general meeting of the holding company. (2) The notice for approval of the resolution by the company or holding company in general meeting shall include the particulars of the arrangement along with the value of the assets involved in such arrangement duly calculated by a registered valuer. (3) Any arrangement entered into by a company or its holding company in contravention of the provisions of this section shall be voidable at the instance of the company unless: the restitution of any money or other consideration which is the subject matter of the arrangement is no longer possible and the company has been indemnified by any other person for any loss or damage caused to it; or Any rights are acquired bona fide for value and without notice of the contravention of the provisions of this section by any other person. In the present case, PQR Ltd intends to enter into an arrangement with its Director Ajit, involving acquisition of Office premises against a consideration other than cash payable by way of issuance of the company's equity shares to Ajit. Accordingly, the Board of Directors of PQR Ltd. is advised to convene the general meeting of the members for prior approval for the transaction and also follow the above provisions of Section 192 of the Companies Act, 2013, for entering the proposed transaction with Ajit, Director of the company. Since, the company is issuing shares to the Ajit, the Company is also required to in compliance with Section 62(1)(c) of the Companies Act, 2013.